The Nigerian electricity landscape is undergoing a significant transformation with the devolution of regulatory powers from the federal level to individual states. This shift is rooted in the amended 1999 Constitution and the Electricity Act 2023, which empowers states to establish their own regulatory commissions and oversee their intrastate electricity markets. The Nigerian Electricity Regulatory Commission (NERC), while retaining its role as the central regulatory authority for interstate and international electricity operations, is mandated to transfer regulatory oversight to state commissions upon their establishment and formal request. This decentralization aims to foster greater efficiency and responsiveness within the electricity sector by bringing regulatory control closer to the specific needs and challenges of each state.
The recent transfer of regulatory oversight of the electricity market in Nasarawa State to the Nasarawa State Electricity Regulatory Commission (NASERC) exemplifies this ongoing devolution. NERC issued the order for this transfer in compliance with the constitutional and legal framework established by the amended constitution and the 2023 Electricity Act. This move signifies a crucial step towards localized electricity regulation in Nasarawa State, enabling NASERC to tailor its regulatory approach to the specific circumstances of the state’s electricity market. The transfer also underscores the growing momentum of decentralized electricity regulation across Nigeria.
The transfer order carries specific directives for the Abuja Electricity Distribution Plc (AEDC), the current electricity distribution company serving Nasarawa State. AEDC is required to establish a subsidiary, AEDC SubCo, within 60 days of August 4, 2025, to specifically handle the intrastate supply and distribution of electricity within Nasarawa State. This subsidiary will then be required to apply for and obtain the necessary license from NASERC to operate within the state. This restructuring is intended to streamline operations and ensure a smooth transition of regulatory authority to the state level. The deadline for the completion of all transfer processes is set for February 3, 2026.
The devolution of regulatory power marks a significant departure from the previous centralized model, where NERC held overarching control over the entire Nigerian electricity sector. The Electricity Act 2023 explicitly delineates the roles of the federal and state regulators, with NERC retaining authority over interstate and international electricity matters, including generation, transmission, supply, trading, and system operations. States, on the other hand, gain the power to regulate their internal electricity markets, fostering a more localized and responsive approach to electricity regulation.
This shift towards decentralized regulation is not unique to Nasarawa State. NERC has already transferred regulatory oversight to several other states, including Edo, Ekiti, Enugu, Imo, Kogi, Lagos, Niger, Ogun, Ondo, and Oyo. These states have established their own regulatory institutions and assumed control over their respective intrastate electricity markets, following the provisions outlined in Section 230 of the Electricity Act. This trend demonstrates a growing national movement towards localized electricity governance.
The decentralization of electricity regulation carries the potential to enhance efficiency, responsiveness, and accountability within the Nigerian electricity sector. By empowering states to regulate their own markets, the regulatory framework can be better tailored to specific local needs and challenges. This localization is expected to lead to improved service delivery, increased investments, and greater transparency in the electricity sector. As more states establish their own regulatory commissions, the Nigerian electricity landscape will continue to evolve towards a more decentralized and dynamic model. The success of this transition will depend on effective collaboration between NERC and the state regulatory commissions, as well as the commitment of distribution companies like AEDC to comply with the new regulatory framework.
