States Back Enugu Power Regulator on Tariff Cut Amid Pushback by Gencos, Discos

•We stand by our tariff  order, didn’t tamper with generation costs, says EERC 

•Insists no justification to keep Band A at N209/kWh 

•IDB mulls partnership with FG to boost power infrastructure

Emmanuel Addehin Abuja and Peter Uzohoin Lagos

Nigeria’s 36 states, through the Forum of Commissioners for Power and Energy in Nigeria (FOCPEN) have thrown their support behind the Enugu Electricity Regulatory Commission (EERC) for cutting the band A customers’ tariff in the state from N209 per kilowatt-hour (kwh) to N160/kwh effective August 1, 2025.

The commissioners’ body, in a statement issued yesterday to clarify recent developments in the Enugu State electricity market, reassured investors and stakeholders about the direction of electricity sector reforms across Nigerian states.

The FOCPEN in the statement jointly signed by its Chairman and Cross River State Commissioner for Power, Eka William, and the Secretary and Benue State Commissioner for Power, OmaleOmale, said Enugu State electricity regulator acted within its legal powers and based on thorough reviews and findings.

The body reaffirmed its commitment to a sustainable and thriving electricity market in Nigeria.

The EERC had on Monday issued an Order, reviewing the Band A tariff charged by MainPower, the state’s electricity distribution company, downward from N209/khh to N160/kwh from August 1, 2025.

However, investors and operators in the Nigerian electricity market such as the distribution companies (Discos) and generation companies (Gencos) swiftly criticised EERC for cutting the Band A tariff, arguing that it will worsen the woes in the country’s power sector as other states may copy Enugu.

But in its statement issued yesterday, FOCPEN acknowledged and clarified the recent decision by the EERC to review and adjust electricity tariffs within its jurisdiction.

The commissioners’ body noted how crucial it had become to understand that Enugu State’s actions were fully aligned with the provisions of the Constitution of the Federal Republic of Nigeria, the Electricity Act 2023, and Enugu State electricity laws and regulations.

It argued that these legal frameworks empower states to regulate their intra-state electricity markets, including determining and implementing electricity tariffs within their jurisdiction, which are fair to electricity consumers and sufficient to allow licensees to recover their operating expenses and investments.

“FOCPEN wishes to also clarify that the EERC’s tariff order followed a comprehensive and meticulous review process that involved a thorough examination of the capital expenditure (Capex) and operational expenditure (OpEx) assumptions of MainPower Electricity Distribution Company, the State electricity distribution company.

“This rigorous assessment was conducted using data and information provided by the distribution company itself. EERC also carried out a rigorous assessment of MainPower’s existing customer tariff classification and regulatory asset base.

“One outcome of its rigorous assessment revealed that EERC had lifeline customers paying N4.00/kwh on Band A Feeders, including a former two time Military Administrator and former Chief of Naval Staff.

“The EERC, acting within the ambit of its regulatory provisions, has set tariffs appropriately based on these findings, aiming for a cost-reflective and fair market for consumers and operators alike.”

Furthermore, FOCPEN emphasised that while Enugu State has, based on its specific market conditions and regulatory findings, adjusted its Band A tariffs downwards, that did not dictate a uniform approach for other States.

For instance, it argued that several state electricity regulatory commissions (SERCs), such as Ekiti, Ondo, and others, have issued tariff orders maintaining the present Multi-Year Tariff Order (MYTO) tariffs.

Also,  EERC has clarified that its recent order that led to reduction of electricity tariff for Band A from N209/kWh (per kiloWatt) to N160 kwh, did not tamper with the prevailing cost of power generation in the country in any way.

The Commission maintained that based on MainPower’s costs, there was no justification to keep the price of electricity for Band A at N209 per kWh in the state.

EERC made the clarification following concerns raised by some sections of the power sector stakeholders, including the Gencos to the new tariff order that was issued by the commission to MainPower Electricity Distribution Limited, the subsidiary of EEDC for electricity distribution in the state.

The tariff order led to the reduction of the tariff for Band A customers to N160 kWh, and the freezing of the tariffs for the other bands effective from August 1, 2025.

But in a statement issued by EERC’s Commissioner for Electricity Market Operations,  ReubenOkoye, the agency maintained that although it inherited the current tariff regime, “the Commission is focused on developing a sub-national electricity market that is transparent, accountable, reliable and sustainable and therefore will review utility costs of service to achieve its mandate to the people of Enugu State.”

“The Order is for MainPower’s operation in Enugu State. It does not affect electricity services in other states, between states and across the country.

“The cost of delivering electricity from the national grid to MainPower via EEDC has been accommodated in full. We did not tamper with that cost at all in our tariff determination, but rather adopted it.

“Our Order ensures that MainPower recovers all its efficient costs and makes reasonable returns in its business of providing electricity services to citizens of Enugu State. Considerations and reconsiderations of the MainPower tariff application and data still presents the same outcome that ensures full payment of invoices to all parties,” it stated.

On the justification for tariff reduction, EERC said having gone through a rigorous process, it had no rationale or justification to keep Band A at N209 in the state.

“EERC has not removed a kobo from the generation and transmission costs of delivering power to Enugu State, but rather included the exact costs to ensure complete payment of MainPower’s portion of the Nigerian Bulk Electricity Trading (NBET) invoices. Also, MainPower’sshare of EEDC’s debts arising from CBN’s interventions in the NESI were included in the tariff.

“EERC and MainPower also reviewed all the relevant data/information provided by MainPower for its tariff determination to ensure accuracy. We are willing to entertain any evidence that shows that our methodology, analysis, computation and output are wrong. The total focus on the reduction of Band A tariff by some commentators is rather unfair to the Commission and to electricity consumers in Enugu State.

“It is important to say that with the ongoing migration of more customers to Band A, the general cost of delivering electricity is spread across larger customer numbers, which should also result in a reduced cost of service delivery,” it added.

It added that the emerging issue or question is whether customers in Enugu state should be over-billed for electricity services and if so, for whose benefit.

“The fact remains that Gencos will not get the over-recovery from any Subco until cost reflective tariff is adopted across board in the country. So, their present concerns are misdirected. We stand ready to provide clarification as well as engage concerned stakeholders so as to provide assurances regarding the Order.

“Again, for emphasis, let us be clear that this tariff Order is only applicable to Enugu State, as it was developed after considering the circumstances, information and data of MainPower in the State,” it said.

The Commission, therefore, invited Gencos that are ready to operate with effective contracts based on a willing-buyer, willing-seller commercial arrangement to consider setting up power plants in Enugu State.

“We will consider and approve your PPA and tariff for them to do their business, as the PPA cost will be a natural pass-through in the tariff,” EERC concluded.

Meanwhile, the Islamic Development Bank (IDB) has expressed interest in partnering with the federal government to address critical infrastructure gaps in the power sector, with ready funds to support the country’s energy development as part of a new Country Engagement Framework.

Officials from the Jeddah-based financial institution, led by Alagi Gaye, disclosed this during a courtesy visit to the Minister of Power, Chief Adebayo Adelabu, in Abuja, according to a statement from Adelabu’s spokesman, BolajiTunji.

Gaye revealed that the IDB has an active portfolio of nearly $2 billion across various sectors in Nigeria, including energy, transport, agriculture, and education, but stressed the bank’s desire to deepen its involvement in power infrastructure. 

He explained that the bank is developing its first-ever Country Engagement Framework for Nigeria since the nation joined the IDB in 2005. Unlike its previous project-based approach, the bank now seeks programme-based interventions that align with Nigeria’s sectoral policies, regulations, and challenges.

He acknowledged the country’s significant electricity access gap and affirmed the IDB’s commitment to incentivizing private-sector investment in the sector. 

During the meeting,  Adelabuemphasised the need for substantial investment to ensure stable, efficient, and affordable electricity for Nigerians. He noted that improving power supply remains a top priority for President Bola Ahmed Tinubu’s administration, citing the Electricity Act of 2023 as a key step toward liberalizing the sector.

Adelabu highlighted ongoing reforms, including the Presidential Power Initiative (PPI)—a $2.3 billion agreement with Germany’s Siemens Energy to modernise Nigeria’s aging power grid.

He noted that the pilot phase, involving the installation of 10 power transformers and 10 mobile substations, has already improved grid stability, with plans for further expansion over the next few years. The government, he said, is also working on a “Super Grid” project to tackle redundancy and has secured support from the World Bank and African Development Bank (AfDB) for transmission upgrades. 

The minister also addressed challenges in the distribution segment, where inefficiencies persist despite privatisation.

The government, he said, retains a 40 per cent stake in Discos and is exploring partnerships to improve their performance.

“A major concern is the metering gap, with only six million meters deployed out of 13 million registered consumers. To address this, the government launched the Presidential Metering Initiative (PMI), which aims to import two million meters annually over five years,” he said.