NERC Transfers Enugu Electricity Market Regulations to State Government

NERC has handed over regulatory control of the Enugu electricity market to the Enugu Electricity Regulatory Commission (EERC), which is operated by the state government starting May 1, 2024, marking the first time NERC has transferred regulatory authority to a state government electricity regulator.

According to NERC’s statement signed by Sanusi Garba and Dafe Akpeneye, once the transfer is complete, NERC will no longer have regulatory responsibility for electricity market activities solely within the transferred state.

“On completion of the Transfers under subsections (2) and (3), whichever occurs later in time, the Commission shall have no further regulatory responsibility whatsoever for electricity market activities carried on entirely within the State to which regulatory responsibility has been transferred and for which the Additional Successor Company has been incorporated and conferred with assets, liabilities, employees, rights, and obligations,” the statement read.

The electricity market in the Federal Republic of Nigeria was previously centralised and the move to decentralisation was achieved when presidential assent was granted to the amendment of relevant portions of the constitution of the Federal Republic of Nigeria on March 17, 2023.

The statement read, “This amendment granted legislative autonomy to federating states in the Federal Republic of Nigeria by empowering the sub-national governments to legislate on the generation, transmission, and distribution of electricity within each respective state.”

The amendment grants state governments authority to enact laws concerning electricity, covering the establishment of state power stations, electricity markets, and regulatory bodies.

It facilitates cooperation among states, local governments, and the federal government for rural electrification and encourages electricity investments.

“Under the new legal framework for NESI, the Commission retains the role as a central regulator with regulatory oversight on the inter-state/international generation, transmission, supply, trading and system operation,” the statement read.

According to the statement, EEDC is expected to incorporate a subsidiary, EEDC SubCo, under the Companies and Allied Matters Act for the assumption of responsibilities for intrastate supply and distribution of electricity in Enugu State from EEDC.

“EEDC shall complete the incorporation of EEDC SubCo within 60 days from the effective date of this Order and, EEDC SubCo shall apply for and obtain a licence for the intrastate supply and distribution of electricity from EERC,” the statement read.

The statement added that all transfers required by the order must be executed by October 22, 2024.