States’ electricity market grows as Enugu, Ondo get full control

The Nigerian electricity market is witnessing a significant shift as more states take control of there power distributions as Enugu and Ondo states secured full ownership of their respective distribution companies (DisCos), marking a significant step towards greater energy autonomy.

This development is part of a broader trend of states assuming greater responsibility for their power supply, as the federal government grapples with persistent challenges in the sector.

At an event in Enugu to mark the complete transfer of regulatory oversight, Chijioke Okonkwo, the chairperson of the Enugu State Electricity Regulatory Commission (EERC), described the transfer as “significant.”

“It marks the beginning of the development of sub-national electricity markets not only in Nigeria or West Africa but across the African continent.

“Today, we now take on the monumental responsibility of regulating and guiding the electricity sector in Enugu State,” Okonkwo stated.

Continuing, the chairperson said: “This assumption of regulatory oversight is not just about the transfer of authority but represents a shared vision for a more efficient, responsive, and innovative electricity market.

“NERC has laid a strong foundation, and we are confident that EERC will build on that legacy to bring about positive changes for the people of Enugu State and beyond, in line with Enugu’s realities.”

Licensing new power distribution company

At the event, Okonkwo said Mainpower was issued an interim distribution license to replace the EEDC in distributing electricity in the state.

Mainpower is a subsidiary of the EEDC, which has been in charge of power distribution in the South-east.

The chairperson urged Mainpower to continue EEDC’s power distribution in the state and work with the commission to ensure growth in electricity services.

He said the commission also licensed Fedikore Limited to build a power plant with a capacity of 10 megawatts.

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Speaking, an official of the Mainpower Electricity Distribution Limited, Kester Enwereonu, assured the people of the state of a better electricity experience in all “ramifications.”

“We are not just identifying with EERC as the pacesetter, Mainpower will also want to be the pacesetter.

“We are assuring you that in the coming weeks, months, and years, and with the regulatory structure that is now tailored to the needs and purposes of the state, we are going to have an improved service to the people of Enugu State,” Enwereonu said.

Ondo state gets full control

This transition, executed under the provisions of the Constitution’s amended sections on concurrent legislative authority and the 2023 Electricity Act, brings Ondo’s power sector under the purview of the newly established Ondo State Electricity Regulatory Bureau (OSERB). In this capacity, OSERB is set to issue an interim license to BEDC Electricity Ondo Limited, a local subsidiary of Benin Electricity Distribution Plc, officially registered with the Corporate Affairs Commission (CAC).

Earlier in 2024, Governor Lucky Aiyedatiwa formed a high-powered committee led by Engr. Tunji Ariyomo to oversee the transition. The committee, which includes key state officials, has completed vital regulations for the state’s power market, alongside a draft amendment of the State Power Sector Law. This transition, the governor emphasized, positions Ondo State to implement more localized energy solutions, expected to enhance power delivery, reduce outages, and boost economic development.

In recent years, Ondo State has pioneered efforts to decentralize Nigeria’s electricity sector, beginning with the passage of its state power law in 2020, then establishing a state electricity regulatory commission in 2021, and now becoming the first state to issue state-sanctioned electricity generation licenses. This achievement sets a precedent for other states aiming to leverage constitutional provisions for energy autonomy.

OSERB now has the authority to regulate local power distribution operations, ensuring compliance with both state and federal guidelines while fostering a responsive and efficient electricity system tailored to Ondo’s unique needs.

States electricity market

In 2023, the National Assembly passed 16 constitutional amendment bills, one of which had to do with devolution of powers to allow states to generate, transmit and distribute electricity.

The Enugu State Government, consequently, enacted the Enugu State Electricity Law, 2023, which established EERC as an agency responsible for the distribution and regulation of power in the state.

In June 2024, President Bola Tinubu assented to the electricity bill, which authorises states, companies, and individuals to generate, transmit and distribute electricity.

NERC, a power regulatory agency in Nigeria, in April this year, began the process of handing Enugu’s EERC the regulatory power over the state’s electricity market.