Seven States Take Charge of Power Regulation under Tinubu’s Electricity Act

Seven Nigerian states have taken bold steps toward controlling their own electricity markets following the implementation of the Electricity Act 2023, which decentralises power regulation and grants states the authority to generate, transmit, and distribute electricity independently.

According to the Nigerian Electricity Regulatory Commission (NERC), Enugu, Ondo, Ekiti, Imo, Oyo, Edo, and Kogi have already begun exercising this autonomy. Others—including Lagos, Ogun, Niger, and Plateau—are expected to transition by September 2025. Anambra State, having passed its electricity law, is also on track to join the list.

Before this reform, the federal government, through NERC, held exclusive control over electricity regulation. However, the Act—signed into law by President Bola Tinubu in 2023—marked a significant shift, empowering states to oversee their power sectors.

Regulatory Transition and Emerging Challenges

With this shift, states now have the power to issue licences to electricity operators and establish regulatory frameworks tailored to their local needs. While industry stakeholders view this as a move toward efficiency and competition, concerns have emerged over the readiness of many states to manage such complex responsibilities.

NERC has approved transfer orders for 11 states so far, with each state granted a six-month transition period. Lagos and Ogun are due to complete their transitions by June, while Niger and Plateau follow in July and September respectively.

Despite the enthusiasm, experts warn of potential issues, including a lack of skilled personnel to set electricity tariffs and enforce regulations. A NERC official, speaking anonymously, noted that only a few professionals in Nigeria possess the expertise to accurately determine electricity pricing.

Operational Frameworks and Local Discos

As states take charge, existing distribution companies (Discos) are required to create subsidiaries for intrastate operations under new state laws. For example, in Enugu, the Enugu Electricity Distribution Company has established MainPower Electricity Distribution Ltd., now regulated by the Enugu State Electricity Regulatory Commission.

Similarly, Lagos has launched the Lagos State Electricity Regulatory Commission (LASERC), which recently issued its first directive asserting exclusive authority over power regulation in the state.

Mixed Reactions from Stakeholders

While some praise the reform as a step toward true federalism and investor-friendly governance, others stress the need for robust legal and institutional frameworks. Consumer rights advocates, like PowerUp Nigeria’s Adetayo Adegbemle, urge states to avoid treating the reform as mere political symbolism and instead develop concrete policies, staff training, and consumer protections.

Concerns also exist around regulatory overlap, tariff inconsistencies, and potential gaps in enforcement—especially where power theft and subsidy administration are involved.

Progressive Steps by Enugu and Ondo

Enugu has been cited as a model state, having appointed experienced leadership and implemented customer protection rules, including a recent order to refund overbilled customers.

Ondo State, on the other hand, had already laid the foundation with its 2020 power law. The state established its regulatory bureau and a state-owned power company, which now engages the Benin Electricity Distribution Company through a local subsidiary, Benin Electricity Ondo Ltd.

Calls for Coordinated Implementation

Experts, including Prof. Dayo Ayoade of the University of Lagos, stress that for decentralisation to succeed, the federal and state governments must collaborate closely. Clear asset delineation, capacity building, and regulatory coherence are crucial to avoiding confusion and ensuring smooth operations.

Ekiti State, for example, has already set up its own regulatory bureau and called for the creation of state-level Discos to ease the transition from federal to state oversight.

Outlook

The Electricity Act 2023 represents a landmark shift in Nigeria’s power sector, aiming to drive local solutions and attract investments. However, without adequate preparedness, technical capacity, and strong governance, the risk of fragmentation and inefficiency remains. The coming months will determine whether the reform leads to lasting improvements or deepens existing challenges in the sector.