Enugu leads charge with tariff cuts as 36 states push for fairer power costs; Discos refuse talks, warn of sector collapse
A major standoff has erupted between Nigerian states and power distribution companies (Discos), following a bold move by the Enugu Electricity Regulatory Commission (EERC) to slash Band A electricity tariff from N209/kWh to N160/kWh. This action, backed by the Electricity Act 2023, has triggered sharp resistance from both power generation and distribution firms.
The Forum of Commissioners of Power and Energy in Nigeria (FOCPEN), representing all 36 states, declared their readiness to negotiate new, fair, and cost-reflective electricity tariffs with Discos operating in their jurisdictions. The states argue that the aim is to ease the burden on citizens and ensure more equitable access to power.
Chairman of the Forum and Cross River State Commissioner for Power and Renewable Energy, Prince Eka Williams, emphasized that each state regulator, empowered by the Electricity Act 2023, has the authority to set appropriate tariffs tailored to local market conditions and consumer needs. He reiterated that the move is not to disrupt the national market but to improve electricity service delivery at the subnational level.
Williams noted, “There’s no one-size-fits-all model in this transition. Some states may choose to subsidize; others may not. What matters is collaboration and honest dialogue that respects each state's unique dynamics.”
In stark contrast, the Association of Nigerian Electricity Distributors (ANED), through its CEO Sunday Oduntan, rejected any negotiation with state governments. Oduntan warned that ongoing tariff reductions could jeopardize recent gains in electricity supply. “States are creating artificial shortfalls. If there’s no funding, the market will collapse,” he said.
Discos have expressed concern that state-imposed tariff slashes could create unsustainable revenue gaps, threatening power sector investments. They allege states are interfering with a fragile market just beginning to show improvement.
The Enugu Electricity Regulatory Commission, however, defended its tariff cut. According to Commissioner for Electricity Market Operations, Reuben Okoye, the decision was based on a rigorous analysis of MainPower Electricity Distribution Company’s operational and capital costs. He clarified that the reduced Band A rate did not affect wholesale generation or transmission costs regulated by the Nigerian Electricity Regulatory Commission (NERC).
“Our review ensured MainPower’s full recovery of costs and reasonable returns. No part of the generation or transmission cost was altered,” Okoye stated, urging stakeholders to review the data rather than speculate.
He added that the move to migrate more consumers to Band A would help spread the cost burden, potentially lowering electricity delivery costs for all.
While Enugu leads in tariff revision, states like Lagos, Ondo, Plateau, and Kogi are at different stages of asserting control over their power markets. Seven states—Enugu, Ondo, Ekiti, Imo, Oyo, Edo, and Kogi—have already transitioned under the Electricity Act, with others including Lagos, Ogun, Niger, and Plateau expected to complete theirs by September.
Lagos State, however, is facing challenges. It's Commissioner for Energy and Mineral Resources, Biodun Ogunleye, accused Discos of resisting state efforts to set local tariffs and lobbying the Senate to amend the Act. “We’re struggling with our Discos. They oppose everything we propose,” he lamented, though he confirmed Lagos will soon unveil its tariff structure.
Despite the tensions, FOCPEN reassured stakeholders that states are not arbitrarily cutting tariffs or relying on federal subsidies. Rather, they are pushing for transparent and sustainable electricity markets that reflect true service delivery costs and attract investments.
The forum stressed that the Enugu model is not binding on other states. For instance, Ekiti and Ondo have maintained current MYTO (Multi-Year Tariff Order) rates. The message from states is clear: electricity reform must be tailored, participatory, and in line with legal provisions.
As this power struggle intensifies, all eyes are now on the federal government, industry regulators, and investors to see how Nigeria navigates this delicate balance between decentralization, sustainability, and service equity in its power sector.
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