*Chijioke Okonkwo, Chairman of the Enugu State Electricity Regulatory Commission explains reasons for crashing tariff for Band A consumers from N209/kWh to N160/kWh, effective from August 1, 2025, and why the regulator freezes Bands B, C, D and E tariffs

Alexander Davis | 绿帽献妻

The Enugu State Electricity Regulatory Commission (EERC), has disclosed it crashed the power tariff for Band A consumers primarily because of the Federal Government’s subsidising electricity generation cost in the country.

绿帽献妻 reports the EERC has issued a new tariff to MainPower Electricity Distribution Limited, the utility that succeeded Enugu Electricity Distribution Company (EEDC), for electricity distribution in the South-East state.

The power company recently reviewed electricity cost for Band A from N209/ kWh (per kiloWatt) to N160 kWh, effective from August 1, 2025.

The development was contained in the regulatory Commission鈥檚 Order No. EERC/2025/003, titled 鈥淭ariff Order for MainPower Electricity Distribution Limited 2025, and issued at the weekend.

The Commission also explained that the decision was cost reflective, insisting that tariffs must reflect power generation subsidy by the Federal Government for the benefit of electricity consumers in the state.

EERC predicated its action on the Enugu State Electricity Law 2023, which empowers the Commission to regulate the activities of operators in power generation, transmission, and distribution in and exclusively for the Enugu State.

Earlier, Governor Peter Mbah of Enugu State, September 2023, had signed the Law, pursuant to the 2023 Constitutional Amendment.

The amendment establishes the legislative authority of the states on electricity matters within their states across Nigeria.

This was followed by the passage of the Electricity Act 2023, that repealed the Electric Power Sector Reform Act, 2005, and introduced major changes, such as the separation of distribution and supply operations, and empowers states to regulate their own electricity markets.

Explaining the development, Chijioke Okonkwo, Chairman of EERC, said the reduction in tariff became imperative, following the Commission鈥檚 review of MainPower鈥檚 tariff and licence applications as the new subsidiary company (SubCo) that operates in Enugu State.

Okonkwo stated: 鈥淲e reviewed their entire costs, using our Tariff Methodology Regulations 2024, and the supporting Distribution Tariff Model to get an average price of N94.

鈥淭he price is low due to some reasons and including the fact the Federal Government is subsidising electricity generation cost which comes to a cost of about N45 out of the actual cost of N112 for Enugu State.”

The Chairman of EERC also said: “That was how we came about the average tariff of N94 as cost reflective tariff at our level as a subnational electricity market.

鈥淭he actual PPA cost of any power purchase made by Mainpower out side the one subsidised by Federal Government, through the Nigerian Bulk Electricity Trader (NBET) will trigger automatic tariff adjustment to accommodate the PPA price because it will not be subsidised by the Federal Government.鈥�

He further noted: 鈥淏reaking this across the various tariff bands means that Band A will be paying N160 while other Bands B, C, D, and E are frozen.

鈥淏and A, at N160 will help MainPower to manage the rate shock, and if the subsidy is removed, the savings will assist them in stabilising the tariff over a defined period of time. Nevertheless, at all times, the tariff will be cost reflective and will not require any state subsidy.鈥�

Why tariff reduction may be short-lived, by Chairman

Despite the euphoria that has greeted the recent power tariff reduction, Okonkwo, however, said that the N160 Band A tariff could be difficult to sustain should the Federal Government remove the generation tariff subsidy currently being enjoyed by聽 electricity consumers in Nigeria.

By implication, these tariffs would most likely increase more than the new rates.

He stated: 鈥淏ut until then, it is only right that Ndi Enugu 鈥� Band A customers enjoy the reduced tariff effective August 1, 2025.”

In a related development, the EERC noted it had set up monitoring and evaluation systems and guidelines to ensure MainPower鈥檚 compliance with service commitments electricity consumers are not exploited in the new tariff regime for Band A consumers.

The Chairman said: 鈥淢ainPower is obliged to publish daily on its website a rolling seven-day average daily hours of supply on each Bank A feeder no later than 9a.m. of the next day.

鈥淲here MainPower fails to deliver on the committed level of service on Band A feeder for two consecutive days, MainPower shall report this to the Commission within 24 hours.”

The Commission said: 鈥淲here MainPower fails to meet the committed service level to a Band A feeder for seven consecutive days, the feeder shall be automatically downgraded to the recorded level of supply.

鈥淭he Commission is committed to working with industry developers, investors, customers and Stakeholders to develop and implement strategies and solutions to provide access and improve electricity services to all the citizens of the state, as this is a win for the establishment.”

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