Former Managing Director of the Nigeria Bulk Electricity Trading Company, Nnaemeka Ewelukwa, has applauded the licenses to regulate tariffs of power generating companies, transmission and distribution companies granted to some state governments by the Nigerian Electricity Regulatory Commission (NERC).

The expert described the transfer of oversight functions from NERC to eight state governments as a step in the right direction which he said would lead to service improvements and lower tariffs paid by energy users.

Ewelukwa was a guest on the Friday edition of Inside Sources with Laolu Akande, a socio-political programme aired on Channels Television.

For decades, Nigeria, Africa’s most populous nation, has been faced with intractable energy challenges, no thanks to an epileptic power supply which significantly affects productivity levels. Despite the privatisation of the electricity sector, power generation, transmission and distribution have remained bogged with hydra-headed monsters of policy inconsistency, low investments and operational challenges.

In 2024, NERC approved the upward review of electricity prices with a unit of power costing about N250 for Band A customers. The cost of petrol and diesel which are readily available alternatives have equally increased by fivefold, compounding the dilemma of consumers. In the same year, NERC granted at least eight State’s Electrify Regulatory Commissions licenses to power plants and power distribution. The states are Enugu, Ekiti, Ondo, Imo, Edo, Kogi, Oyo and more recently, Lagos.

Ewelukwa, a former member of the Presidential Task Force on Power Reform, said the amendment of the Electricity Act 2023 significantly opened up the space for states to step into the power space and support government efforts. “What that has done is that it has democratised the electricity space significantly. We now have different states trying different initiatives,” he said.

He said with the amendment of the Act, there are now different theatres where things are happening for the betterment of power supply in Nigeria. He said with the initiatives of the state governments, there is cause for optimism for the power sector.

Power Generation By Geopolitical Zone

Ewelukwa listed one of the major benefits of the fragmentation of the power sector to be an upsurge in competition particularly at the state level. “When competition is done appropriately, it ultimately leads to service improvements; it results in lower prices. So, I believe that different states having their different regulatory authorities makes the work of NERC easier because it now has fewer states to focus on because other states are running their own thing,” he said.

He said with the states having full control over every aspect of the regulation of electricity, government has been brought to the grassroots. “When you have states now regulating the electricity market, it brings the solution closer to the point where the problem is originating. I see enhanced competition triggering innovation,” he said.

The expert advised the states to team up and work collaboratively as a geopolitical zone rather than in silos trying to generate power by themselves, transmit and distribute it.

“I do think that at some point, we will have states coming together to create synergy even along the geopolitical zones. We will now have states that can say why don’t we pull resources together? We don’t all have to invest in generation.

“Of the six states in this zone, two can focus on generation whilst the rest focus on transmission and distribution so that they can synergise at that local level, pull forces together and start to create that electricity market. Why I see that as a way of the future is that a lot of investors are equally looking at investing in bulk. Rather than invest 2 megawatts in this state, 6 megawatts in another, an investor would rather build a 200 megawatts (station) in one location,” he said.

Ewelukwa also called for synergy between government at all levels and traditional rulers to curb transmission line vandalism which has become ubiquitous in parts of the country.

The expert said, “When it comes to things like vandalism, ultimately, it may come to the need for more synergy between the Federal Government and traditional rulers because at the end of the day, every single equipment that is vandalised anywhere is within a traditional domain. There are traditional institutions within that space that can complement efforts being done by the Federal Government, and by the state government.

“I believe that working together, creating that synergy that pulls in the public not just as spectators waiting for the system to fix itself but also realise that when something is vandalised, it affects everybody.”