The Forum of Commissioners for Power and Energy in Nigeria, (FOCPEN) has issued a statement to clarify recent developments in the Enugu State electricity market.
The forum has expressed support for the recent order by the Enugu Electricity Regulatory Commission (EERC) reducing electricity tariff for Band A customers from N209/kWh to N160/kWh.
The forum also reassured Investors and Stakeholders of electricity sector reforms across States in Nigeria.
According to FOCPEN in a statement issued and signed by the Chairman, Forum of Commissioners of Power and Energy in Nigeria Mr. Eka Williams, who is also the Commissioner of Power and Renewable Energy, Cross River State, and Barr. Omale Omale, Secretary, Forum of Commissioners of Power and Energy in Nigeria and, Commissioner of Power, Renewable Energy and Transport, Benue State, wishes to acknowledge and clarify the recent decision by the Enugu State Electricity Regulatory Commission (EERC) to review and adjust electricity tariffs within its jurisdiction.
The statement reads “It is crucial to understand that Enugu State’s actions are fully aligned with the provisions of the Constitution of the Federal Republic of Nigeria, the Electricity Act 2023, and Enugu State electricity laws and regulations”
“These legal frameworks empower States to regulate their intra-state electricity markets, including determine and implement electricity tariffs within their jurisdiction, which are fair to electricity consumers and sufficient to allow licensees recover their operating expenses and investments”
“FOCPEN further clarified that the EERC’s tariff order followed a comprehensive and meticulous review process that involved a thorough examination of the capital expenditure (Capex) and operational expenditure (OpEx) assumptions of MainPower Electricity Distribution Company, the State electricity distribution company”
“This rigorous assessment was conducted using data and information provided by the distribution company itself. EERC also carried out a rigorous assessment of MainPower’s existing customer tariff classification and regulatory asset base”
It also states that the EERC, acting within the ambit of its regulatory provisions, has set tariffs appropriately based on these findings, aiming for a cost-reflective and fair market for consumers and operators alike.
FOCPEN emphasizes that while Enugu State has, based on its specific market conditions and regulatory findings, adjusted its Band A tariffs downwards, this does not dictate a uniform approach for other States. For instance, several SERCs (e.g Ekiti State, Ondo State, etc), have issued tariff orders maintaining the present MYTO tariffs.
“Without any equivocation, each State Electricity Regulator is uniquely positioned within to determine and implement appropriate electricity tariffs that are fair to customer and at same time, catalyze investments within their electricity markets, depending on their peculiar electricity market dynamics, licensee cost structures, consumer needs and regulatory assessments.
“Furthermore, FOCPEN wishes to unequivocally assure investors in the Nigerian Electricity Supply Industry (NESI) that States are not seeking to arbitrarily downgrade tariffs, nor depend on unsustainable electricity subsidies by the Federal Government”.
On the contrary, States are resolute in their call for the removal of untargeted and opaque federal subsidies, advocating instead for the establishment of truly cost-reflective sub-national and wholesale electricity markets. States, including Enugu State, are collectively committed towards fostering financially viable and sustainable electricity sectors where electricity tariffs accurately reflect the cost of service delivery, thereby encouraging investment and efficiency
Olusola Akintonde