The Enugu state government through the Enugu State Electricity Regulatory Commission (EERC) has taken over the task of electricity regulation in the state.
This task which used to be for the Nigerian Electricity Regulatory Commission (NERC) is now theirs.
The takeover which took place on Tuesday is the first step towards state-level empowerment in the electricity sector as provided for under the 2023 Electricity act.
The act empowered States, companies and individuals to generate, transmit and distribute electricity in the country.
This milestone achievement according to Punch was made possible by the enactment of the Enugu State Electricity Law 2023 and the establishment of the EERC.
At the event, Chairman of the EERC, Chijioke Okonkwo, stated, “This event is significant as it marks the beginning of the development of sub-national electricity markets not only in Nigeria or West Africa but across the African continent.
“Today completes the six-month transition for the transfer of regulatory authority from the national regulator, NERC, to the EERC, as stipulated in Section 230 of the Electricity Act 2023 and the consequential order of NERC dated 22nd April 2024.”
Moving forward, electricity distribution in the state is to be carried out by Mainpower Electricity Distribution Ltd, a subsidiary of the Enugu Electricity Distribution Company PLC (EEDC).
The subsidiary has promised to ensure Enugu state residents have access to adequate power supply.
The Demand for Democratization of the Power Sector
On June 9, 2023, the Government of Nigeria adopted the Electricity Act 2023, effectively repealing the Electricity and Power Sector Reform Act of 2005.
The new act introduced a range of key features including the liberalization of Nigeria’s electricity generation, transmission, and distribution at the National level, empowering States, companies and individuals to generate, transmit and distribute electricity.
The Act also introduces mechanisms to incentivize investment in renewable energy projects, such as feed-in tariffs – a policy that guarantees a fixed price for renewable electricity fed into the grid-and tax incentives. It also offers a range of incentives, including tax incentives, to investors in the power sector. Establishment of clear guidelines for the licensing, monitoring, and supervision of market participants.
Enugu Acting as Trailblazers
Among the first states to key into the deregulated power sector is Enugu state who have gone ahead of other states to fully implement the full deregulation of the sector add take over power distribution in the state through the Enugu State Electricity Regulatory Commission (EERC).
Other states in the process of taking control of electricity distribution include Ekiti, who have requested for the transfer of regulatory oversight of the intrastate electricity market in the state to the body to be known as the Ekiti State Electricity Regulatory Bureau (EERB). There is also the impending transfer of regulatory oversight of the electricity market in Ondo State to the Ondo State Electricity Regulatory Bureau (OSERB).
Checks with the Ministry of Power also revealed that Edo, Kaduna, and Oyo have also signed their electricity laws in compliance with the Electricity act of 2023.
Significance for Enugu Residents
The takeover of power distribution within Enugu state by the Enugu State Electricity Regulatory Commission (EERC) means that every resident of Enugu state would most likely be moved to band A which is more expensive than other electricity bands due to the removal of the government subsidy in the sector.
This has led to widespread fears by Enugu residents as to the affordability isssues that would be necessitated by the takeover and movement to Band A.
Speaking on this fears, Chairman of the EERC, Chijioke Okonkwo in an interview on the Arise morning shown stated “in Enugu state today, once there is power outage especially in industrial areas, you have generators coming on to self-generate electricity.
“you can’t imagine what the financial implication is that all these generators are running in full capacity. We are talking about over 500 megawatts being self-generated by the citizens across the state at a cost of N500 per kilowatt,
“to put that into perspective, Band A only costs N250 per kilowatt which is cheaper than it costs to self-generate
Speaking on network hinderances to power distribution he said “it is on our front burner, so in Enugu today, we are opening up all the energy resources in the state for use by developers.
“Enugu is a coal state, so if you want to use coal as long as you are taking note of environmental considerations, by all means come in as long as you are putting in place all the environmental management systems.”
Expectations going forward
With the arrival of the Enugu State Electricity Regulatory Commission (EERC), it is expected that Enugu citizens would begin to enjoy even more frequent power supply with the power industry being opened up to private individuals, a situation that is expected to be replicated across more states soon enough.
