NERC hands over regulatory power to Lagos

The Federal Government, through the Nigerian Electricity Regulatory Commission, has announced the transfer of regulatory oversight of the electricity market in Lagos State to the newly established Lagos State Electricity Regulatory Commission.

This was contained in a statement released by NERC on X (formerly Twitter) on Thursday.

This move follows the amended provisions of the Nigerian Constitution and the Electricity Act of 2023.

NERC said the transfer of regulatory oversight is in line with the amended Constitution of the Federal Republic of Nigeria and the Electricity Act of 2023.

This development follows a comprehensive process that aligns with the requirements outlined in the Electricity Act 2023, which allows states to assume regulatory control over their intrastate electricity markets, provided they notify the NERC and meet the necessary conditions.

The EA 2023 also retains NERC’s role as the central regulator overseeing inter-state and international electricity operations, including generation, transmission, supply, trading, and system management.

While NERC continues to regulate national activities, LASERC will be the designated authority for Lagos’ intrastate electricity market.

Recall that two weeks ago, Governor Babajide Sanwo-Olu signed the Lagos State Electricity Bill 2024 into law.

The statement read, “In compliance with the amended Constitution of the Federal Republic of Nigeria and the Electricity Act 2023 (Amended), the Nigerian Electricity Regulatory Commission (“NERC” or the “Commission”) has issued an order to transfer regulatory oversight of the electricity market in Lagos State from the Commission to the Lagos State Electricity Regulatory Commission.

“Recall that with the EA 2023, the Commission retains the role as a central regulator with regulatory oversight on the inter-state/international generation, transmission, supply, trading and system operations.

“The EA also mandates any state that intends to establish and regulate intrastate electricity markets to deliver a formal notification of its processes and requests NERC to transfer regulatory authority over electricity operations in the state to the State Regulator.

“Based on this, the Government of Lagos State complied with the conditions precedent in the laws, duly notified NERC and requested for the transfer of regulatory oversight of the intrastate electricity market in Lagos State.”

This shift reflects the increasing decentralization of regulatory power in the Nigerian electricity sector, with states given more autonomy in managing their local energy markets.

As part of the transfer, the NERC’s Order outlines a series of steps to ensure a smooth transition of responsibilities to LASERC. Among the key provisions of the Order are, “The transfer Order by NERC has the following provisions: Direct Eko Electricity Distribution Plc to incorporate a subsidiary (EKEDP SubCo) to assume responsibilities for intrastate supply and distribution of electricity in Lagos State from EKEDP.

“EKEDP shall complete the incorporation of EKEDP SubCo within 60 days from 5th December 2024. The sub-company shall apply for and obtain a licence for the intrastate supply and distribution of electricity from LASERC, among other directives.

“Direct Ikeja Electric Plc to incorporate a subsidiary (IE SubCo) to assume responsibilities for intrastate supply and distribution of electricity in Lagos State from IE.

“IE shall complete the incorporation of IE SubCo within 60 days from 5th December 2024. The sub-company shall apply for and obtain a licence for the intrastate supply and distribution of electricity from LASERC, among other directives.”

The commission further directed that all transfers envisaged by this order must be completed by 4th June 2025.