Tariff Battle Deepens: Discos Reject States’ Push for New Electricity Rates

Electricity distribution companies have rejected moves by state governments to renegotiate tariffs, warning that the initiative could destabilize the Nigerian power sector.

This follows the recent decision of the Enugu Electricity Regulatory Commission (EERC) to slash Band A tariffs from ₦209/kWh to ₦160/kWh, a move that sparked backlash from power generation and distribution firms.

While the Forum of Commissioners of Power and Energy in Nigeria insists that states now have full authority under the Electricity Act 2023 to regulate their markets, Discos argue that unilateral cuts could cause funding shortfalls and reverse recent improvements in supply.

Seven states—Enugu, Ondo, Ekiti, Imo, Oyo, Edo, and Kogi—have taken control of their electricity markets, with Lagos, Ogun, Niger, and Plateau expected to follow by September.

Prince Eka Williams, chairman of the forum, said state regulators were empowered to “implement tariffs fair to customers and attractive to investors.” He added that states could choose to subsidize electricity but stressed that tariff reviews were based on market realities.

However, Association of Nigerian Electricity Distributors CEO, Sunday Oduntan, warned that the move was “unsustainable” and could “plunge the sector into crisis.”

“We are not negotiating with states. If this continues, the power supply will collapse,” Oduntan told The PUNCH.

In response, the EERC maintained that its tariff review applied only to Enugu and fully accounted for generation and transmission costs. It added that the reduction followed a “rigorous assessment” and did not impact national market stability.

Meanwhile, Lagos State Energy Commissioner, Biodun Ogunleye, accused Discos of frustrating state-level reforms but assured that Lagos would unveil its tariff plan next week.

As tensions escalate, analysts warn of a looming regulatory showdown that could reshape Nigeria’s electricity sector.