Politics

States Accuse Federal Government of Undermining Power Sector Decentralization

Published by Tope Fakinlede on July 30th, 2025.

States Accuse Federal Government of Undermining Power Sector Decentralization

President Bola Ahmed Tinubu

State governments have raised concerns that the Federal Government is attempting to roll back progress made in decentralizing the power sector, cautioning that proposed changes to the Electricity Act could strip them of their newly acquired autonomy and derail ongoing electricity reforms in Nigeria.

This issue came to the forefront during a high-level meeting on Tuesday between the Minister of Power, Adebayo Adelabu, and energy commissioners representing various states. Representatives of the governors insisted on full recognition of their regulatory powers, particularly in areas such as electricity tariffs, licensing, and distribution.

Tensions escalated following the recent move by the Enugu Electricity Regulatory Commission to reduce the Band A tariff from ₦209 to ₦160 per kilowatt-hour. The Federal Government rejected this decision, stating that states would bear the financial burden of any resulting subsidy or market deficit. Additionally, the Nigerian Electricity Regulatory Commission (NERC) reaffirmed that states do not have authority over the national grid or federally licensed power stations.

At the emergency meeting held at the Ministry of Power headquarters, Prince Eka Williams, Cross River State’s Commissioner for Power and Chairman of the Forum of Power Commissioners, criticized the Federal Government for delaying the formation of a joint federal-state committee on electricity—a key agreement with the Nigeria Governors’ Forum.

“That committee is yet to be established. Had it been, we wouldn’t be caught in this repetitive cycle,” Williams remarked. “We need to operate within a framework that honors our traditional roles and includes all stakeholders.”

Williams expressed worries about attempts to recentralize powers that the Electricity Act 2023 clearly devolved to states. He also pointed to unresolved issues around state equity in power assets, weak collaboration, and slow regulatory alignment despite persistent appeals.

On behalf of the Forum, Williams stressed that states remain dedicated to deepening Nigeria’s electricity market but feel marginalized from critical policy decisions.

“We cannot endorse any amendment that contradicts the original intent of the Act,” he stated. “Efforts to recentralize constitutionally devolved powers would be a serious setback.”

While acknowledging progress made by some states—including enacting electricity laws and setting up independent regulators—Williams noted gaps remain, especially in transparency and cooperation. Despite ongoing calls, NERC and related agencies have yet to adequately address the realization of state ownership in Distribution Companies (Discos) and the Nigeria Bulk Electricity Trading Plc (NBET).

Supporting Williams, Omaley Omaley, Rivers State Commissioner for Energy and Secretary of the Forum, emphasized that states aim to foster a unified electricity market that safeguards consumers, attracts investment, and delivers value—without creating regulatory confusion.

“We’re not here to create conflict. States have engaged deeply with the law, stakeholders like REA and NERC. Seventeen states have secured mini-grid permits through REA, and eighteen have passed electricity laws and established regulatory commissions,” Omaley explained. “If Enugu’s actions seem different, it’s part of the learning process, not a challenge.”

Omaley called for cooperation rather than competition, highlighting that electricity is now a market commodity, not just a utility. He warned that inconsistent tariffs, scattered subsidies, and poor market coordination risk undermining public confidence and investor trust.

“If tariffs drop in one state, neighboring governors will seek explanations. We need a clear, national framework to avoid confusion. That’s why ongoing dialogue is vital,” he added.

The Forum appreciated the Minister’s pledge for regular consultations but urged these meetings to result in concrete, timely actions. They reaffirmed their dedication to reforming electricity markets within legal boundaries and warned that any efforts to recentralize regulatory powers would face resistance.

“Power has shifted from being a mere utility to a market commodity. States must be empowered to protect consumers and foster investor confidence,” the Forum stated.

Minister of Power Adebayo Adelabu, in his opening remarks, cautioned about the risks of uncoordinated state-level electricity markets, emphasizing the need for collaboration to safeguard the national grid and prevent regulatory chaos.

“We respect states’ rights but coordination is essential. Our electricity market is interconnected, and misaligned policies could disrupt power supply and deter investors,” Adelabu noted.

He assured that the Federal Government, through NERC, would continue to work with states to harmonize rules and address challenges posed by market fragmentation.

Adelabu highlighted key achievements under President Bola Tinubu’s administration, including the passage of the Electricity Act 2023—which constitutionally empowers states to manage their electricity markets—the introduction of the first National Integrated Electricity Policy in over twenty years, and increased local and foreign investment in grid infrastructure.