State VS National: The Electricity Tariff Tangle

Enugu State’s decision to reduce electricity tariffs for Band A customers from N209/kWh to N160/kWh, starting August 1, 2025, has ignited controversy in Nigeria’s power sector.

While the Enugu Electricity Regulatory Commission (EERC) argues the cut is cost-reflective and factors in federal subsidies, GenCos, DisCos, and the Nigerian Electricity Regulatory Commission (NERC) insist the move is “arbitrary” and could destabilize an already fragile market.

At the heart of the debate is the Electricity Act 2023, which empowers states to regulate their own electricity markets. Enugu’s move is seen by some as a bold step towards decentralization, but critics warn it may set a risky precedent. The challenge now is balancing consumer relief with the financial survival of GenCos and DisCos, while ensuring tariffs remain truly cost-reflective and the national grid stable.