NERC emphasized that states do not have jurisdiction over the national grid and electric power stations established under federal laws. The commission advised states to reflect wholesale costs in tariffs or be prepared to pay subsidies.
The Enugu Electricity Distribution Company's tariff reduction has sparked controversy, with generation and distribution companies warning that states cannot unilaterally fix tariffs without generating and transmitting their own electricity.
The Association of Nigerian Electricity Distributors (ANED) and the Association of Power Generation Companies (APGC) have expressed concerns that the tariff cut threatens to destabilize the power sector. They argue that states lack the power to determine electricity costs, as they rely on the national grid for power supply.
ANED's CEO, Sunday Oduntan, cautioned that the Enugu tariff reduction would lead to consumer resistance to electricity bill payments and create financial burdens on the Federal Government.
APGC's CEO, Joy Ogaji, emphasized that states cannot unilaterally fix tariffs, as they do not produce electricity. She described the Enugu tariff cut as "regulatory rascality" that undermines the national electricity market.
In response, the Enugu Electricity Regulatory Commission (EERC) clarified that its tariff cut did not affect the prevailing cost of power generation. The commission maintained that it aimed to develop a transparent and sustainable sub-national electricity market.
The controversy highlights the challenges facing Nigeria's power sector, including regulatory conflicts, financial burdens, and the need for sustainable electricity pricing.