News
FG Halts Transfer Of Electricity Regulation To States
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Tinubu government suspends transfer of electricity regulation to states for better understanding and preparation.
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Minister Adelabu proposes pilot programs in selected states to address potential issues.
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Adelabu stresses need for state frameworks on asset protection, vandalism prevention, and capital investment.
the Federal Government, led by President Bola Ahmed Tinubu, has suspended the transfer of regulatory authority over electricity markets to state governments. Minister of Power Adebayo Adelabu announced this on Friday at the 8th edition of the Africa Energy Market Place (AEMP) conference in Abuja.
Previously, in April, the Nigerian Electricity Regulatory Commission (NERC) had transferred oversight of the electricity markets in Ondo, Ekiti, and Enugu to the states’ electricity regulatory bureaus (OSERB).
However, Adelabu stated that the transfer is suspended to ensure that state governments and power sector stakeholders fully understand the requirements for operating an electricity market.
Adelabu emphasized that a thorough understanding of regulatory oversight transfer is crucial for the survival and sustainability of the nation’s power sector.
He said: “Therefore, we must tread carefully, we should not be in a hurry. The market is not a mature market, it is not mature enough. With everything centralised for a single regulator, we have a myriad of issues.
“Now we intend to create a regulatory framework across the 36 states, it is something that we must do in a highly systematic and strategic manner.”
“We need just a couple of states as a pilot, which is why I actually halted granting of further regulatory autonomy to states.”
Adelabu said each state needs a framework capable of protecting assets and liabilities, addressing vandalism and consumer protection, and providing enough capital for continuous investments and maintenance of infrastructure.
The minister also said the transfer of regulatory oversight would be piloted in selected states across the geopolitical zones in the country.
He said: “When we have each of these zones represented in the pilot and we allow it to run for three to six months, or up to a year, all the possible issues would have been reflected so that we are going to have a learning curve, and all those issues will be addressed before granting further regulatory autonomy because I have a feeling that we don’t have a comprehensive understanding of what this autonomy means.
FG Halts Transfer Of Electricity
“The fact that we gave a state regulatory autonomy doesn’t mean that it’s just about distribution of electricity but it is regulation across the value chain. Generation within your territory, transmission within your territory, and distribution in your territory, including tariff setting.
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“The moment you take over the regulatory activities of Lagos state, when we talk about tariff, about subsidy, it will be on your neck as a state. I do not know the balance sheet you want to leverage to guarantee the necessary settlements on a monthly basis.
“So we all have to sit down and let everybody have a complete understanding of what this means. We will know if we are ready to have full autonomy or it will be partial autonomy for the meantime before we achieve a mature electricity market.”
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