Lagos Gains Regulatory Autonomy Over Electricity Market

Ikeja Electric to Create Subsidiary

The Nigerian Electricity Regulatory Commission (NERC) has transferred regulatory oversight of the electricity market in Lagos State to the Lagos State Electricity Regulatory Commission (LASERC).

Lagos Electricity Market Regulatory Autonomy aligns with the amended Constitution of the Federal Republic of Nigeria (CFRN) and the provisions of the Electricity Act 2023 (Amended), granting Lagos State the authority to independently regulate its electricity market.

Lagos Joins States with Electricity Regulatory Autonomy

With Lagos Electricity Market Regulatory Autonomy, the State is now among the growing list of states, including Enugu, Ekiti, Ondo, Imo, Oyo, Kogi, and Edo, that have received authorisation to establish their electricity regulatory bodies. These states will now oversee the regulation and operations of electricity markets within their respective jurisdictions.

NERC Confirms Lagos’ Compliance with Legal Requirements

In a transfer order seen on Wednesday, NERC stated that the Lagos State Government had met all legal prerequisites, including formally notifying NERC and requesting the transfer of regulatory authority for its intrastate electricity market to LASERC.

Central and State Roles Defined Under the Electricity Act 2023

According to NERC, the Electricity Act 2023 designates the Commission as the central regulator for interstate and international electricity operations, covering generation, transmission, supply, trading, and system operations.

However, states intending to regulate their intrastate electricity markets must formally notify NERC and follow a defined process to establish their regulatory agencies.

Ikeja Electric Directed to Create a Subsidiary for Lagos Operations

Under the terms of the transfer order, Ikeja Electric (IE) has been instructed to set up a subsidiary, IE SubCo, to manage intrastate electricity supply and distribution in Lagos State.

The order mandates that IE complete the incorporation of IE SubCo within 60 days and secure a licence from LASERC for its operations. Additionally, IE must clearly define the geographic boundaries of its distribution zone within Lagos State and install boundary meters at points where its network crosses into neighbouring states.

“lE shall identify the actual geographic boundaries of its distribution zone and carve out its network in Lagos State as a standalone network with the installation of boundary meters at all border points where the network crosses from Lagos State into another state,” the Order read.