States resist Senate move to amend Electricity Act, warn against re-centralisation of power sector

A fresh dispute has emerged over the future of Nigeria’s electricity sector, with state electricity regulators accusing the National Assembly of attempting to erode powers already devolved to states under the Constitution and the Electricity Act 2023.

The regulators, drawn from 16 states, have warned that the proposed Electricity Act (Amendment) Bill 2026 could undermine ongoing reforms aimed at decentralising the power sector and developing sub-national electricity markets across the country.

In a memorandum submitted to the Senate Committee on Power, the state regulators argued that several provisions of the amendment bill appear designed to restore broad regulatory authority to the Federal Government and the Nigerian Electricity Regulatory Commission (NERC), contrary to the spirit of recent constitutional reforms.

The document, signed by the heads of electricity regulatory commissions and bureaus in Abia, Anambra, Bayelsa, Edo, Ekiti, Enugu, Gombe, Imo, Kogi, Lagos, Nasarawa, Niger, Ogun, Ondo, Oyo and Plateau states, expressed concern that the proposed legislation could reverse gains made since the enactment of the Electricity Act 2023.

According to the regulators, states have already begun establishing independent electricity markets, attracting investors and developing regulatory frameworks based on the powers granted by the Constitution and existing law.

They disclosed that after consultations with the Senate Committee on Power, they were requested to harmonise their concerns into a single memorandum for consideration by lawmakers and other stakeholders.

The regulators identified 17 areas of concern in the amendment bill, including provisions relating to state legislative powers, federal oversight of electricity activities connected to the national grid, regulation of wholesale electricity markets, administration of consumer assistance funds, tariff-setting mechanisms and the role of NERC in resolving disputes involving state regulators.

At the heart of the disagreement is the interpretation of constitutional amendments that removed electricity from the Exclusive Legislative List and empowered states to legislate and regulate electricity matters within their territories.

The state regulators argued that the amendment bill wrongly suggests that state legislative authority over electricity is derived from the National Assembly rather than directly from the Constitution.

They maintained that the National Assembly lacks the constitutional authority to grant, limit or redefine powers already vested in state governments through constitutional amendment.

According to the memorandum, attempts to subject state electricity markets to extensive federal supervision would undermine the federal structure established by the Constitution and weaken the decentralisation objectives of the Electricity Act 2023.

The regulators further warned that uncertainty created by the proposed amendments could discourage investment in state electricity markets, noting that several investors had already committed resources based on the existing legal framework.

They argued that Nigeria’s longstanding centralised regulatory model had failed to significantly improve electricity supply over the past two decades and cautioned against a return to a system they described as ineffective.

The memorandum also challenged proposals that would grant NERC final administrative appellate authority over disputes involving state regulators, insisting that state commissions and NERC operate within separate constitutional jurisdictions and should not be subordinate to one another.

Similarly, the regulators opposed provisions that would expand federal control over tariff regulation, consumer protection measures and electricity activities occurring entirely within state jurisdictions.

They called instead for improved coordination between federal and state regulators through mutually agreed frameworks rather than what they described as “top-down” federal legislation.

The proposed establishment of a Forum of Electricity Regulators also drew criticism, with the states arguing that collaboration among regulators should be based on voluntary agreements rather than statutory mandates.

In addition, the regulators rejected provisions declaring electricity generation, transmission, distribution and supply as essential services across both federal and state markets, warning that such measures could inadvertently widen NERC’s authority into areas constitutionally reserved for states.

The dispute comes nearly three years after the Electricity Act 2023 was enacted to implement constitutional amendments that empowered states to participate directly in electricity generation, transmission and distribution within their territories.

Since then, several states, including Lagos, Edo, Enugu, Ekiti and Ondo, have enacted electricity laws and established regulatory institutions as part of efforts to attract investment and improve power supply at the sub-national level.

Industry experts have widely hailed the decentralisation initiative as a major opportunity to address Nigeria’s chronic electricity challenges by encouraging competition, investment and innovation.

However, the proposed amendments have reignited debate over the balance of powers between Abuja and the states, setting the stage for what could become a defining battle over the future structure of Nigeria’s electricity industry.