The Enugu State Electricity Regulatory Commission (EERC) has defended its recent decision to reduce the electricity tariff for Band A customers in Enugu, insisting that there was no justification to maintain the previous rate of ₦209 per kilowatt-hour (kWh). The revised tariff, set at ₦160/kWh, takes effect from August 1, 2025, and is seen as a substantial move to provide relief to consumers while keeping local energy costs in line with real market conditions.
Why the Tariff Was Reduced
Cost Review: According to EERC Chairman Chijioke Okonkwo, the Commission reviewed MainPower’s tariff and licence applications using the 2024 Tariff Methodology Regulations and a Distribution Tariff Model. This rigorous process established an average cost-reflective tariff of approximately ₦94/kWh, enabled largely by ongoing federal government subsidies on power generation.
Federal Subsidy: The federal subsidy currently covers ₦45 of the actual ₦112/kWh generation cost for Enugu. This support allows for a lower distribution tariff without burdening either the state or consumers unnecessarily.Market Adjustment: The decision aims to prevent “rate shock” and maintain stable supply as the Nigerian electricity sector continues its transition to decentralized, state-regulated markets.
Key Points from the EERC’s Position
- No Justification for ₦209/kWh: EERC maintains that MainPower’s actual costs do not justify keeping the Band A rate at ₦209/kWh in the current market, particularly with the federal subsidy in place.
- Freezing Other Tariff Bands: Bands B through E will see their rates frozen, meaning no increase or decrease, ensuring that only Band A representing higher-consumption and priority supply customers are directly affected by the reduction.
- Oversight and Consumer Protection: The Commission has mandated daily public reporting of feeder performance and introduced mechanisms that allow for automatic tariff adjustments or customer downgrades if electricity supply standards are not met.
Industry Reaction and Broader Implications
Generation Companies Critical: Representatives of power generation companies (GenCos) have criticized the EERC’s move, arguing that the assumption of continued federal subsidies is problematic and could deepen sector debts if the subsidy regime is not fiscally supported at the federal level.
Precedent for Other States: Enugu’s bold approach is putting pressure on other states empowered by the 2023 Electricity Act to consider similar tariff reviews in their jurisdictions as the power sector liberalizes further.Legal and Regulatory Backing
The action is grounded in the Enugu State Electricity Law 2023, which vests the EERC with exclusive authority to regulate all electricity activities within Enugu. This follows constitutional reforms giving Nigerian states increased autonomy over their local electricity markets.
EERC stresses that the ₦160/kWh rate for Band A is sustainable so long as federal subsidies remain. If subsidies are withdrawn, tariffs could rise again, but for now, consumers are set to benefit from a considerably lower rate. The move underscores a commitment to transparency, regulatory prudence, and consumer welfare in Enugu’s evolving electricity market.
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