A major disagreement is brewing between state electricity regulators and the National Assembly over proposed amendments to the Electricity Act 2023, with states warning that the changes could undermine the decentralisation of Nigeria's power sector.
Electricity regulatory commissions and bureaus from 16 states have formally opposed key provisions of the Electricity Act (Amendment) Bill 2026, arguing that the legislation seeks to return powers already transferred to states under constitutional reforms and the Electricity Act 2023.
In a memorandum submitted to the Senate Committee on Power, the regulators expressed concerns that the proposed amendments would significantly expand federal oversight and diminish the autonomy granted to states to develop and regulate their own electricity markets.
The document was endorsed by electricity regulators from Abia, Anambra, Bayelsa, Edo, Ekiti, Enugu, Gombe, Imo, Kogi, Lagos, Nasarawa, Niger, Ogun, Ondo, Oyo and Plateau states, all of which have begun implementing varying degrees of electricity sector reforms since the passage of the Electricity Act.
According to the regulators, the proposed legislation contains several provisions that could effectively restore the dominance of the Federal Government and the Nigerian Electricity Regulatory Commission (NERC) over activities that now fall within the jurisdiction of state governments.
They identified 17 contentious areas in the bill, including issues relating to the legislative powers of state assemblies, regulation of electricity markets within states, management of the wholesale electricity market, administration of consumer support funds, oversight of independent transmission and distribution systems, and the authority of NERC over state regulators.
The states argued that the constitutional amendments which paved the way for the Electricity Act 2023 clearly granted them powers to make laws and regulate electricity activities within their territories, stressing that such powers were derived directly from the Constitution and not from any legislation enacted by the National Assembly.
They therefore faulted provisions in the amendment bill which, in their view, imply that state governments require federal authorisation to legislate on electricity matters.
The regulators described such provisions as inconsistent with the principles of federalism and constitutional governance, warning that they could trigger legal disputes over jurisdictional authority.
Beyond constitutional concerns, the states said the amendments could disrupt ongoing investments in the electricity sector. They noted that several states had already attracted investors and launched reforms based on the framework established by the Electricity Act 2023.
According to them, changing the rules at this stage could create uncertainty and weaken investor confidence in emerging state electricity markets.
The memorandum also challenged proposals that would allow NERC to retain broad supervisory authority over electricity activities connected to the national grid, arguing that such provisions could effectively neutralise state regulatory powers.
Rather than increasing federal control, the regulators advocated stronger cooperation between federal and state institutions, particularly on transmission-related matters that require coordination across jurisdictions.
The states also rejected proposals granting NERC final administrative appellate authority over disputes involving state electricity commissions, maintaining that both federal and state regulators operate independently within their respective constitutional mandates.
In addition, they opposed provisions relating to tariff regulation, consumer protection, anti-trust measures and electricity subsidies within state markets, insisting that such responsibilities should remain under the control of state regulators where electricity activities occur exclusively within state boundaries.
The controversy extends to proposals concerning the Forum of Electricity Regulators, host community obligations, licensing arrangements for government-owned electricity enterprises and timelines for states transitioning into independent electricity markets.
For the regulators, the central issue is preserving the gains of the power sector reforms introduced following the Fifth Alteration to the 1999 Constitution, which removed electricity from the Exclusive Legislative List and empowered states to play a direct role in electricity generation, transmission and distribution.
Since the reforms took effect, several states have established electricity regulatory agencies and enacted laws aimed at improving power supply, attracting private investment and reducing dependence on the national grid.
The latest dispute, however, suggests that the debate over how regulatory authority should be shared between the Federal Government and the states is far from settled.
As the Senate continues consideration of the amendment bill, industry stakeholders will be watching closely to see whether lawmakers uphold the decentralisation framework created by the Electricity Act 2023 or move towards a model that gives greater control to federal authorities.
The outcome is expected to have far-reaching implications for investment, regulation and the future direction of Nigeria's electricity sector.
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