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NERC: States Cutting Power Tariffs Required to Fund Subsidy

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The Nigerian Electricity Regulatory Commission (NERC) has stated that state governments lack jurisdiction over the national grid and power stations established under federal laws or operating with licenses issued by the commission.

 

 

The commission stated this in its reaction to the controversies generated by the Enugu Electricity Regulatory Commission’s decision to slash the Band A tariff.

In a notice on Thursday, the national power regulator advised state governments to reflect the wholesale costs in tariffs or be ready to pay subsidies for any tariff shortfall.

The commission acknowledged that states that have assumed full regulatory oversight over their intrastate markets are now authorized to create and regulate transactions in their state electricity markets, saying this extends to the development of tariff methodologies that shall apply to end-use customers in their respective states.

This came as the power distribution and generation companies warned that states’ absolute power to determine tariffs begins when they start generating and transmitting electricity.

The NERC, in its notice on Thursday, cautioned, “As states do not have jurisdiction over the national grid and over electric power stations established under federal laws/operating under licences issued by the commission; they must holistically incorporate the wholesale costs of grid supply to their states without any qualification or deviation in their design of tariffs for end-use customers in order not to distort the dynamics of the market or be prepared to make a policy intervention by way a subsidy for any deviation in the tariff structure that distorts the wholesale generation, transmission and legacy financing costs in the Nigeria Electricity Supply Industry.”

NERC said no institution would take decisions that expose the national grid and wholesale electricity market to a financial crisis in contravention of express powers granted to them by the constitution.

“The commission’s attention has been drawn to the increasing stakeholders’ concerns on the Tariff Order (Order No. EERC/2025/003) issued by the Enugu State Electricity Regulatory Commission, to its Licensee Mainpower Electricity Distribution Limited that relies exclusively on electricity supply (generation and transmission) from the national grid.

“NESI stakeholders have expressed concern about the consequences of the reduction of tariffs for Band A customers in MEDL’s network area to N160.4 per kWh and the freezing of tariffs of customers in the other bands on the wholesale generation and transmission costs, along with the financing costs for legacy obligations in NESI. It is pertinent to state that the N160.4 per kWh was arrived at largely by reducing the current average Generation Tariff of N112.60 per kWh to NGN45.75, with an assumption of a subsidy component, a difference of N66.85 per kWh.

“Section 34(1) of the EA places a statutory obligation on the commission to create, promote and preserve efficient electricity industry and market structures, and ensure the optimal utilisation of resources for the provision of electricity and we are also aware that EERC as a sub-national electricity regulator also has a similar statutory obligation in their enabling law; and neither NERC nor EERC as responsible regulatory institutions would take decisions that expose the national grid and wholesale electricity market to a financial crisis in contravention of express powers granted to them by the constitution,” the Federal Government agency said.

It informed all stakeholders that the commission is currently engaging EERC on their tariff order as it relates to any perceived area of misinterpretation/misunderstanding on wholesale generation and transmission costs on their import of power from the national grid and grants further assurances of its unwavering statutory commitment that the electricity market will be made whole in terms of cost recovery in compliance with the laws of the Federal Republic of Nigeria.

Meanwhile, the Association of Nigerian Electricity Distributors and the Association of Power Generation Companies said the Enugu Electricity Distribution Company and other states contemplating tariff reductions should wait till they start generating and transmitting their electricity before slashing tariffs.

The Chief Executive Officer of ANED, Sunday Oduntan, told Band A customers in Enugu State not to rejoice yet, saying there can’t be a 20-hour power supply at N160 per kilowatt-hour.

On Sunday, the Enugu Electricity Regulatory Commission announced the reduction of the Band A electricity tariff from N209/kWh to N160/kWh, asking MainPower Electricity Distribution Company to implement this from August 1.

The decision has since sparked crises as generation and distribution companies accused the EERC of attempts to create more financial burden in the power sector, saying no state should impose more subsidy obligations on the Federal Government that is still owing N5.2tn of unpaid shortfalls.

While the ERRC said it did its calculations well before dropping the tariff to N160/kWh, Oduntan warned that no state has the power to determine the cost of electricity at the moment, stressing that the states can only align with the tariff order of the Nigerian Electricity Regulatory Commission, except if the value chain totally belongs to them.

Earlier in a statement, Oduntan raised the alarm over growing consumer resistance to electricity bill payments following the tariff cut by the Enugu State Electricity Regulatory Commission, warning that the move threatens to destabilise the country’s fragile power sector.

He disclosed that since EERC announced a reduction in Band A tariffs, customers in other states have begun to demand similar cuts, with some outrightly refusing to pay their electricity bills.

The Chief Executive Officer of the Association of Power Generation Companies, Joy Ogaji, also shared the same sentiment. According to her, states cannot unilaterally fix tariffs because they do not produce electricity.

“The fact speaks for itself. The fact that EERC still regulates a product it does not produce at the state level, but from the wholesale market, they cannot unilaterally regulate that price,” she said.

Ogaji added that the EERC made reference to NERC’s tariff regulations, which assume a subsidy that she deemed imaginary because there is no written policy from the Federal Government stating that there is a subsidy, nor is there a financing plan to backstop the ever-growing and accumulating debts, which have impaired GenCos’ books.

“Their claim based on an imaginary subsidy is baseless. You can’t build something on nothing. Tariff documents are not child’s play. They form the fulcrum for many decisions, including business decisions, potential investors, and so on.

“This regulatory rascality will not be sustainable for decentralisation. Do you even have a justification for claiming a subsidy? Let’s assume there is one in a federal market, you have applied to be independent of? Can you eat your cake and still have it? How do you even claim this subsidy as a state? Unfortunately, we lack leadership in this sector,” she said.

Meanwhile, the EERC clarified that its recent tariff cut 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/kWh in the state.

In a statement by EERC’s Commissioner for Electricity Market Operations, Reuben Okoye, 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.”

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Doku insists On League Victory Despite Everton Draw With Man City

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Jeremy Doku insisted Manchester “will keep on fighting” in the Premier League title race despite their “painful” draw with Everton on Monday.

 

City drew 3-3 with the Toffees at Hill Dickinson Stadium, with Doku scoring a 97th-minute equaliser, having also scored the opening goal.

Doku’s equaliser (96:49) is City’s third-latest goal on record (since 2006-07) in a Premier League game after John Stones’ strike against Arsenal in September 2024 (97:14) and Gabriel Jesus’ goal against Everton in February 2019 (96:52).

Doku has had a hand in six goals across his last five games for City in all competitions (four goals, two assists), as many as in his previous 22 games combined (one goal, five assists).

The Belgian also created the most chances in the match against Everton (four), completed the most dribbles (5/7) and won the most duels (14/19).

City avoided defeat in a Premier League game despite trailing by 2+ goals as late as the 82nd minute for the first time since March 2012 against Sunderland (3-3).

They went on to win the league title in 2011-12, and Doku believes City can still beat Arsenal to the trophy this season.

“First half, we played well and created a lot of chances. We know if we don’t score those chances, it is going to get difficult at the end,” said Doku.

“Obviously, they are at their own stadium, they create chances, and they are dangerous, and they scored two goals, but I think we gave them the game.

“Good that we came back because one point is not bad in games like this.

“We will see. It feels painful now. There is still a lot of games to go. We lost two points, but we know that one point can be important at the end.

“We will keep on fighting. We owe it to ourselves and to our fans.”

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Xenophobia: Nigerians Seeking Return From S A Will Bear The Cost – FG

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The Ministry of Foreign Affairs said Nigerians interested in repatriation from South Africa will be responsible for the cost of their return trip to Nigeria.

The ministry’s spokesperson, Kimiebi Ebienfa, stated this during a press briefing on Monday in Abuja.
The briefing came shortly after a closed-door meeting between the Ministry’s Permanent Secretary, Dunoma Ahmed, and the South African Acting High Commissioner, Lesoli Machele.

Mr Ebienfa said the process will be self-funded and not state-funded, as it is a voluntary decision that the Nigerian government will only facilitate and coordinate.

In the recent past, such reparations have been sponsored by Nigerian airline owners, particularly Allen Onyema, the CEO of Air Peace.

The Nigerian government, on Sunday, indicated its readiness to repatriate its citizens from South Africa due to xenophobic violence.

The effort primarily targets Nigerians who feel threatened by the xenophobic violence and tension in parts of South Africa, as the protests against black immigrants in the country continue. Two Nigerians were killed last month.

Since the announcement, about 130 Nigerians in South Africa have expressed a willingness to return home voluntarily.

Mr Ebienfa stated that the return of the Nigerians depends on their financial capacity, as they would be expected to fund their trip back home individually.

He said, “Those willing to leave are expected to approach the high commission and, given that their decision is voluntary, have the resources to fund their return to Nigeria.”
The government will not “provide an aircraft from Nigeria to convey them.”

He also noted that the speed of the repatriation process will be determined by the availability of funds.
“Yes, 130 as of this morning have registered, but actualisation would be required to have their flight ticket to move back to Nigeria.”

Mr Ebienfa also explained that Nigerians who have so far expressed interest are motivated either by concerns about threats to their lives or by fear of arrest by South African law enforcement agencies.

“There are two groups of Nigerians who want to come back. One group feels the country is not safe for them and wants to come. They have all their papers intact.

“Then there is also the second group that has travel document violations or resident permit violations. And instead of running away from law enforcement, they are appealing that the government facilitate their movement back to Nigeria,” he explained.

However, he noted that the process is still being worked out and that the government would step in to provide aircraft or other needed assistance if tensions rise and the situation becomes more volatile.

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Marcelino To Leave Villarreal At End Of Season

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Villarreal head coach Marcelino Garcia Toral will leave ​at the end of the ‌season despite securing a second consecutive Champions League qualification, the LaLiga ​club said on Monday (today). 
The ​60-year-old, who also managed the ⁠team between 2013 and ​2016 and guided them back ​to the Spanish top flight, has led Villarreal more than any other ​coach, overseeing 298 games ​across all competitions.

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Villarreal sit third in LaLiga ‌with ⁠four matches remaining, a position that guarantees them elite European football next season.
Marcelino, who ​rejoined Villarreal ​in ⁠2023, won the Copa del Rey with ​Valencia in 2019 and ​the ⁠Spanish Super Cup with Athletic Bilbao in 2021. He has ⁠been ​linked with English ​Premier League clubs.
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