Twenty-one states, including Rivers and Kano, are yet to assume regulatory control of their electricity markets nearly three years after the enactment of the Electricity Act 2023, even as 15 states have already transitioned to independent market oversight.
The Nigerian Electricity Regulatory Commission disclosed that the states that have completed the transition have established their own electricity regulatory frameworks and are now responsible for market development, investment attraction, tariff oversight, and customer protection within their jurisdictions.
According to the commission, the shift follows the decentralisation provisions of the Electricity Act 2023, which empower subnational governments to regulate electricity generation, transmission and distribution within their territories after completing the necessary legal and administrative processes.
NERC noted that 15 states have so far completed the transition to state-level regulation. These include Enugu, Ekiti, Ondo, Imo, Oyo, Edo, Kogi, Lagos, Ogun, Niger, Plateau, Abia, Nasarawa, Anambra and Bayelsa.
However, the remaining 21 states yet to assume regulatory control are Adamawa, Akwa Ibom, Bauchi, Benue, Borno, Cross River, Delta, Ebonyi, Gombe, Jigawa, Kaduna, Kano, Katsina, Kebbi, Kwara, Osun, Rivers, Sokoto, Taraba, Yobe and Zamfara.
Industry analysts said the slow pace of transition in some states could delay the expected benefits of decentralisation, including improved power supply, localised tariff structures, and accelerated investments in embedded generation and mini-grid projects.
Under the new framework, once a state completes its transition, the state electricity regulator takes over licensing of intrastate electricity operations, enforcement of technical standards, tariff setting for local distribution, and protection of electricity consumers within the state.
NERC, in turn, retains oversight only on interstate and national grid-related activities.
The commission emphasised that state regulators are expected to drive local electricity market growth by encouraging private sector participation, promoting renewable energy deployment, and ensuring service quality standards for distribution companies operating within their jurisdictions.
The timeline released by the commission shows that the earliest transitions occurred in October 2024, when Enugu and Ekiti states assumed regulatory authority, followed by Ondo shortly after. The pace accelerated in 2025, with several states, including Oyo, Edo, Lagos and Ogun, completing their transitions. The most recent additions include Nasarawa, Anambra and Bayelsa between January and February 2026.
It was observed, however, that some of the 15 states have not set up their regulatory commissions.
Power sector stakeholders argue that states yet to transition risk missing opportunities to attract investments in off-grid electrification projects, particularly in underserved rural communities.
They also note that state-level regulation could help address longstanding distribution challenges by enabling more flexible tariff structures, targeted subsidies, and enforcement mechanisms tailored to local conditions.
With less than half of the states having completed the transition, many argued that the effectiveness of the Electricity Act reforms will largely depend on how quickly the remaining states establish their regulatory institutions and operational frameworks.
Apparently overwhelmed by the country’s power woes, the Federal Government recently pushed the challenge to the 36 states, asking them to take over power generation, transmission, and distribution.
The Federal Government said this was the only solution to the power crisis in the country.
The Minister of Power, Adebayo Adelabu, said at an energy summit in Lagos that the Electricity Act’s impact includes decentralisation and liberalisation.
“In a country as big as Nigeria, with almost a million square kilometres of landmass, over 200 million people, millions of businesses, thousands of institutions (health and educational institutions), 36 states plus the Federal Capital Territory, and 774 local governments—centralisation cannot work for us. The responsibility of providing stable electricity can never be left in the hands of the Federal Government.
“At the centre, you cannot, from Abuja, guarantee stable power across the country. So, this is one thing that the Act has achieved—decentralisation. That has now allowed all the states or the subnationals to play in all segments of the power sector value chain—generation, transmission, distribution, and even service industries supporting the power sector,” he stated.
He called on the remaining 21 states to set up their electricity market.
“I believe other states will follow suit in operationalising the autonomy granted, with full collaboration of the national regulator. We are working actively with these states to ensure strong alignment between the wholesale market and the retail market.
“In this regard, we believe the active involvement of the state governments, particularly in the off-grid segment, is critical, given the series of roundtable engagements held with governors by the Rural Electrification Agency, as well as ongoing efforts to closely track the distribution companies’ performances within their respective jurisdictions,” Adelabu emphasised.
(Punch)
