- Electricity Price Cuts: Discos Reject Tariff Talks With States
- States defend their legal right to set cost-reflective electricity tariffs.
- Lagos, others plan own tariff policies despite pushback from Discos.
The standoff between state governments and electricity distribution companies (Discos) has intensified following the Discos’ outright rejection of state-led negotiations on tariff adjustments.
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EKO HOT BLOG reports that this development comes after the Enugu Electricity Regulatory Commission (EERC) slashed Band A tariffs from ₦209/kWh to ₦160/kWh, sparking nationwide debate.
The Forum of State Commissioners of Power and Energy insists states are empowered under the Electricity Act 2023 to regulate tariffs in their domains. They argue that tariff reductions, such as Enugu’s, are based on market realities and tailored economic assessments to promote fair pricing and encourage investment.
Seven states including Enugu, Ekiti, Ondo, Imo, Oyo, Edo, and Kogi now control their electricity markets, with others like Lagos and Ogun preparing for transition. Forum Chairman Prince Eka Williams maintained that each state regulator is capable of setting cost-reflective tariffs suited to its energy landscape.
However, Discos, through their association’s CEO, Sunday Oduntan, described the tariff cut as dangerous to market stability, warning it could reverse recent power supply improvements. He accused states of undermining sectoral gains, declaring the Discos would not negotiate with states on pricing.
The EERC defended its decision, stating the new tariff followed detailed evaluation of MainPower’s financials and customer base in Enugu. It assured all generation and transmission costs were preserved and that the reduction would not affect national revenue flow.
Lagos State Commissioner for Energy, Biodun Ogunleye, disclosed that Discos in Lagos are resisting state-led reforms. Despite the pushback, Lagos is set to announce its tariff policy next week.
States reiterated support for transparent, cost-reflective pricing, dismissing federal subsidy dependency. EERC concluded by inviting Gencos willing to work under market-based terms to invest in Enugu.
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