Cause for worry

Without a regulator in place, since NERC has since divested its offices in the concerned states, consumers are left without any authority to complain to, over service.

There are concerns over Imo State, which NERC reported is yet to license the Enugu Electricity Distribution Company (EEDC) serving the state. Yet, the state regulator quickly licensed the Orashi Electricity Company, within few weeks of its establishment, to generate, transmit and distribute electricity.

The stakeholders claimed that the approval was granted without a clearly defined regulatory framework, raising concerns about standard coordination and jurisdiction. The regulators warned against politically-induced measures that can affect the fragile electricity market. 

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Such uncertainty is unhelpful in a market which requires heavy investment. While a kilowatt of power can be generated at N180, the cost of a kilometer of 330Kv transmission line, averages $1 million, and a 33kv distribution line, estimated at $40,000.

As Mr Adetayo Adegbemle, an analyst in the sector put it succinctly, “In some states, special assistants and ministry officials are issuing electricity permits without legal authority, outside the framework of the Electricity Act 2023. This poses a serious concern, because licenses granted through such processes may be challenged in court and declared unconstitutional.”

States which engaged in such political interference must note that the huge investments that are needed in the electricity sector can only come in a market that has statutory certainty and security of investment.

But, as Adegbemle said, “As this decentralisation evolves, some states will get it right and some will not. Some states may eventually become wholesale sellers or exporters of electricity, while others will depend on imports from neighbouring markets.”

As suggested at the meeting, states within a geo-political zone could explore the possibility of joining hands to have a common regulatory authority, build a common generation source, a regional grid and a distribution network. That would save costs and offer cheaper electricity to consumers.

Already, Kano, Katsina and Jigawa states, which together constitute approximately 67, 477 square kilometers, 34-35 million people, and a GDP of N22.28 trillion, are exploring such an option; we urge other states which cannot go it alone, to emulate them.

The initial challenges facing the state regulatory agencies would go away if the states tenaciously followed the process, instead of cutting corners. Indeed, we agree with the pioneer chairman and chief executive officer of the Abia State Electricity Regulatory Authority, Emeka Onyegbule, on that.

He said the state ministries must not issue licenses, as that can destroy the markets the sub-nationals are trying to build and so, every state should either set up its regulatory body or join forces with neighbouring states to do so.

The administration of President Bola Tinubu, through the Electricity Act, 2024, has given the states the opportunity to own their destiny with respect to the generation of electricity, its distribution and regulation. We urge the states to embrace the reform and make hay so the light can shine.