States move to harmonise electricity tariffs nationwide

The Nigeria Governors’ Forum has said it is developing a uniform electricity tariff methodology to guide pricing across states and address inconsistencies arising from the decentralisation of electricity regulation.

The forum disclosed this at the ongoing Lagos Energy Summit in Lagos, where its representative, Chijioke Chukwu, said the proposed framework would help states navigate the complexities of tariff determination and establish more consistent pricing arrangements.

Chukwu said the NGF is working on the methodology following challenges encountered by some states in their efforts to establish electricity tariffs under the decentralised 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.

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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.