The Enugu Electricity Regulatory Commission (EERC) has justified the recent adjustment in electricity tariffs, stating the move is necessary to build a resilient, investment-friendly energy market capable of catering to the state’s rising demand.
Speaking on News Central’s Business Edge, EERC Chairman/CEO Chijioke Okonkwo outlined the commission’s rationale behind the review.
“We had actually informed MainPower that we will consider your full costs, but we’ll verify it and validate it…” he explained, citing variables such as generation and transmission costs, regulatory asset base, capital and operational expenditure projections, allowable distribution loss, and cost of capital.
Okonkwo elaborated on how the commission approached the pricing structure, particularly noting discrepancies in generation costs passed onto Enugu via the national grid.
“…what main power was expected to pay was just over N45, that the energy was delivered to it from the national grid. I mean, we don’t think that we should implement the 112…”
The EERC used a cost-reflective approach that resulted in an average tariff of N94 across different customer categories.
Okonkwo also highlighted the commission’s focus on performance-based incentives and data-driven decisions, stating that significant distribution losses were factored in as a performance target.
The Commission has also set a long-term power consumption target, aiming for 700 megawatts by 2031.
“Now, our policy document that is in place actually gave us specific targets that by the end of 2026, we should be able to consume approximately 300 megawatts… by 2030, 2031, we should be able to move that to 700 megawatts,” Okonkwo said.
He added that Enugu State is poised to attract new energy investments and develop a competitive power market, providing better returns for investors.
The passage of the Electricity Act 2023 by President Bola Tinubu in June marked a significant policy shift, decentralising electricity governance and empowering states to regulate their own electricity sectors. As a result, over 16 states, including Enugu, have established their regulatory agencies.
Despite this, the Nigerian Electricity Regulatory Commission (NERC) recently emphasised that state agencies cannot independently reduce tariffs for power sourced from the national grid.
