The Nigerian Electricity Regulatory Commission (NERC) has initiated a series of high-level engagements with the Enugu State Electricity Regulatory Commission (EERC) and its licensee, Mainpower Electricity Distribution Limited (MEDL) to address the tariff reductions recently approved by the Enugu regulator.
The dispute stems from EERC’s recent Tariff Order (Order No. EERC/2025/003), which drastically reduced electricity tariffs for Band A customers within Enugu State to ₦160.4 per kilowatt-hour (kWh). The move includes the freezing of tariffs for customers in other bands, despite the state’s continued reliance on the national grid for electricity generation and transmission.
According to NERC, this tariff slash is built on an unsustainable reduction of the national average generation tariff from ₦112.60 per kWh to ₦45.75, a sharp decrease of ₦66.85 per kWh that implies an assumed subsidy component—an action that may breach national electricity market rules and obligations.
“The Commission’s attention has been drawn to increasing stakeholders’ concerns about the impact of the Enugu tariff order on the broader Nigerian Electricity Supply Industry (NESI),” said NERC in an official statement released on Thursday. “Any unilateral action that distorts the wholesale generation, transmission, and legacy financing costs must be holistically addressed.”
Read also: States have no jurisdiction to deviate from tariffs – NERC warns
Background: The Dual Regulatory Framework
The controversy underscores the challenges of Nigeria’s newly decentralised electricity sector following the Electricity Act 2023 and the constitutional amendments that expanded the legislative and regulatory powers of state governments over electricity markets within their jurisdictions.
Under the new framework, the federal government—through NERC—retains authority over interstate generation and transmission, and states that have opted in now exercise regulatory control over intra-state electricity markets. Enugu is among the first wave of ten states, including Lagos, Ogun, and Edo, that have successfully received regulatory powers from NERC.
However, the Act stipulates that states which rely on the national grid for power supply must reflect wholesale market costs in their tariff designs, unless they explicitly implement state-funded subsidy schemes. Failure to do so, NERC warns, could result in under-recovery of sector costs, threatening the financial stability of the entire electricity value chain.
