STATES MOVES TO HARMONISE ELECTRICITY TARRIFS NATIONWIDE
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The Nigeria Governors’ Forum has announced the development of a standardized electricity tariff methodology designed to harmonize pricing mechanisms across all states and mitigate the discrepancies resulting from the decentralization of regulatory oversight within the power sector.
During the current Lagos Energy Summit in Lagos, the forum revealed these details, with its representative Chijioke Chukwu asserting that the proposed framework will enable states to navigate the intricacies of tariff determination while fostering more consistent pricing arrangements.
Chukwu stated that the NGF is currently developing the necessary methodology, a move necessitated by the difficulties several states have faced while attempting to establish electricity tariffs within the decentralized regulatory framework.
“We’re currently working on a uniform tariff methodology that will also help states really get to the point of getting their tariffs out,” he said.
He said the framework was expected to be ready by the first quarter of next year.
Chukwu explained that the decentralisation of electricity regulation had created the need for common minimum standards to guide the operations of state electricity markets.
According to him, the transition from a centralised regulatory structure to multiple state regulators could result in inconsistencies in tariffs, licensing requirements and technical standards without adequate coordination.
He disclosed that the forum had developed a model electricity law, using the Electricity Act as its parent legislation, to guide states in establishing their regulatory frameworks.
He, however, stressed that the model law was not designed for automatic adoption by states but would serve as a guide that could be adapted to their individual circumstances.
Chukwu said some states had encountered difficulties in enacting their electricity laws because of limited technical knowledge and capacity to understand the regulatory requirements.
Beyond the model legislation, he said the NGF was developing public-private partnership guidelines, integrated resource plans, service-level agreements and other instruments to support functional electricity markets across states.
The development comes amid concerns over weak regulatory enforcement and fragmentation in the electricity sector.
A member of the Presidential Task Force on Power Sector Reset and Restoration, Engr. Uzoma Achinanya, warned that the failure of regulators to monitor and enforce existing regulations had weakened discipline in the industry.
He argued that introducing new regulations would not address the sector’s challenges without effective monitoring and enforcement.
“And regulation without monitoring and enforcement is no regulation; you can write all the laws, all the regulations. In Nigeria, regulation is more than the height of this building, but no monitoring and no enforcement. That is why nobody is doing it,” he said.
Achinanya also identified poor payment discipline as a major threat to sustainable electricity supply, warning that gas suppliers and generation companies could not continue providing services without receiving payment.
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