Paragraph 1: Decentralization of Electricity Regulation in Nigeria
Nigeria’s power sector is undergoing a significant transformation with the decentralization of electricity regulation. This shift empowers states to oversee their intra-state electricity markets, fostering greater control and potentially improved service delivery. The Nigerian Electricity Regulatory Commission (NERC), while retaining its overarching authority over inter-state and international electricity operations, has been granting regulatory oversight to individual state commissions. This move aligns with the amended Constitution of the Federal Republic of Nigeria and the Electricity Act 2023, which provide the legal framework for this decentralized approach. The aim is to enhance efficiency, responsiveness, and accountability within the power sector by bringing regulatory functions closer to the consumers they serve.
Paragraph 2: Niger State Joins the Decentralized Electricity Regulation Movement
Niger State has become the latest addition to the growing list of states regulating their electricity markets. Following in the footsteps of Imo, Enugu, Ekiti, Ondo, Oyo, Edo, Kogi, and Ogun, Niger State’s Electricity Regulatory Commission (NSERC) has been officially granted regulatory oversight by NERC. This landmark decision marks a crucial step towards localized management of the electricity sector within the state. The NSERC is now empowered to regulate intra-state electricity generation, transmission, supply, trading, and system operations, tailored to the specific needs and challenges of Niger State. This localized approach is expected to facilitate quicker responses to consumer concerns and more effective management of the state’s electricity infrastructure.
Paragraph 3: NERC’s Continued Role and Regulatory Oversight Transfer Process
While state commissions assume control over intra-state electricity markets, NERC maintains its pivotal role as the central regulator for inter-state and international electricity operations. This ensures continued coordination and standardization across the national grid while allowing states the flexibility to manage their local grids. The transfer of regulatory oversight to Niger State followed a formal request by the state government and fulfillment of all legal and regulatory requirements stipulated by NERC. This process ensures a structured and transparent transition of responsibilities, minimizing disruption and maintaining regulatory integrity.
Paragraph 4: Restructuring of Distribution Companies for Intra-State Operations
To facilitate the smooth transition to state-level regulation, existing electricity distribution companies (DisCos) operating in Niger State are required to establish subsidiaries dedicated to intra-state operations. Abuja Electricity Distribution Plc (AEDC) and Ibadan Electricity Distribution Company Plc (IBEDC) have been directed by NERC to incorporate subsidiaries – AEDC SubCo and IBEDC SubCo, respectively – specifically to manage electricity supply and distribution within Niger State. This restructuring ensures clear delineation of responsibilities between the parent companies’ inter-state operations and the subsidiaries’ focus on the intra-state market under the purview of NSERC.
Paragraph 5: Timeline and Implementation of the Regulatory Transfer
NERC has established a clear timeline for the incorporation and licensing of the new subsidiaries and the complete transfer of regulatory oversight to NSERC. AEDC and IBEDC have been given 60 days from January 10, 2024, to incorporate their respective subsidiaries. Following incorporation, the subsidiaries must apply for and obtain licenses from NSERC. The entire transfer process, including the operational handover of responsibilities, is mandated to be completed by July 9, 2025. This structured approach ensures a phased transition, minimizing disruption to electricity services during the handover.
Paragraph 6: Ensuring a Seamless Transition and Compliance
NERC has emphasized the importance of adherence to legal and operational requirements throughout the transition process. Both AEDC SubCo and IBEDC SubCo are expected to comply fully with the stipulated regulations to ensure a seamless transfer of responsibilities and maintain the integrity of electricity services in Niger State. This includes compliance with technical standards, customer service obligations, and reporting requirements set by NSERC. The focus is on ensuring that the decentralized regulatory framework enhances service delivery, promotes competition, and ultimately benefits electricity consumers in Niger State.
