The tariff battle between electricity distribution companies (Discos) and state governments in Nigeria has escalated, with Discos rejecting review talks with states over power tariffs. The dispute centers around states like Enugu, Lagos, Ondo, and Plateau, which want to review and potentially slash electricity tariffs to make them more reflective and less burdensome for residents.
However, Discos, represented by the Association of Nigerian Electricity Distributors (ANED), are opposed to any tariff cuts, arguing that they are unsustainable and could cripple the power sector. ANED’s CEO, Sunday Oduntan, claims that state-level tariff reductions could lead to market shortfalls, disrupt power supply improvements, and create liquidity issues in the sector. He emphasized that Discos won’t engage in negotiations with states on pricing, citing potential losses and operational challenges.
On the other hand, the Forum of State Commissioners of Power and Energy (FOCPEN) defends the states’ right to regulate tariffs within their jurisdictions, citing the Electricity Act 2023. They argue that each state can determine appropriate tariffs based on specific market dynamics and economic conditions. FOCPEN maintains that state-level tariff regulation is essential for ensuring affordable and reliable electricity for residents.
Enugu State recently reduced Band A electricity tariffs from N209/kWh to N160/kWh, effective August 1, 2025. The Enugu Electricity Regulatory Commission (EERC) insists that this decision is cost-reflective and considers federal subsidies. This move has sparked debate and raised questions about the potential impact on the power sector.
The standoff between Discos and states may destabilize the power sector, affecting investment and efficiency. Lagos State plans to announce its tariff policy soon, while other states like Ekiti and Ondo have chosen to maintain current tariffs. The outcome of this dispute will likely shape Nigeria’s electricity reform trajectory, with implications for consumers, Discos, and the overall power sector.
As the situation unfolds, stakeholders are closely watching the developments, aware that the resolution of this dispute will have far-reaching consequences for the power sector and the economy as a whole. The need for a balanced approach that considers the interests of both Discos and consumers has become increasingly apparent, and a sustainable solution is crucial for Nigeria’s economic growth and development.
