FG, NASS back regulatory alignment for multi-tier electricity market

The Federal Government and the National Assembly have reiterated their commitment to supporting complementary roles for electricity regulators as Nigeria transitions toward a multi-tier electricity market.

This was disclosed at a workshop in Abuja focused on the legal, policy, and regulatory harmonisation between federal and state institutions following the decentralisation of the Nigerian Electricity Supply Industry (NESI).

Speaking at the event, Rilwan Lanre Babalola, Special Adviser to the President on Power and Chairman of the Presidential Task Force on Power Sector Reset and Restoration, described electricity as the foundation for industrialisation, economic competitiveness, job creation, and national prosperity.

Babalola urged participants to view the transition as a collaborative effort toward building a single, cohesive Nigerian electricity market rather than focus on protecting separate institutional jurisdictions.

“Every major reform creates new opportunities. It also creates new interfaces. As Federal and State institutions assume their respective responsibilities, questions will naturally arise regarding regulatory boundaries, market oversight, technical standards, and commercial arrangements. That is not a weakness of the reform; it is the natural consequence of institutional evolution,” Babalola said.

He emphasised that while the Electricity Act decentralises aspects of governance, it does not decentralise the physics of electricity.

“Our networks remain interconnected, our markets remain interdependent, and our prosperity remains shared. That is why harmonisation is not optional. It is fundamental to preserving one efficient Nigerian electricity market,” he added.

Also speaking, Enyinnaya Abaribe, Chairman of the Senate Committee on Power, reaffirmed the legislature’s commitment to creating an enabling legal framework that allows federal and state electricity regulators to perform complementary roles.

Abaribe noted that the success of the current decentralisation should not be measured merely by the number of states establishing electricity markets or obtaining asset transfer orders.

“Rather, success should be measured by whether Nigeria achieves a coherent, efficient, bankable, and integrated electricity market where federal and state institutions perform complementary rather than competing roles. We therefore require harmonised rules governing the relationship between NERC and State Electricity Regulatory Commissions,” Abaribe stated.

This follows a recent call by Joseph Tegbe, Nigeria’s Minister of Power, on participants in the Nigerian Electricity Supply Industry (NESI) to avoid actions that could affect the decentralised, state-led electricity market.

Tegbe had explained that while the Federal Government retains an important leadership role, the state governments now have expanded responsibilities. He explained that the Nigerian Electricity Regulatory Commission (NERC) will continue to regulate areas within its jurisdiction, while State regulators are emerging to supervise their respective markets.

He further stated that the transmission company remains a national asset while distribution companies continue to serve Nigerian customers.

According to Tegbe, “Generation companies will continue to supply energy into the grid; private investors provide capital; development partners provide technical support; while Consumers remain at the heart of every decision.

“None of these institutions exists in isolation. Our success is interconnected. This is why collaboration must become the defining principle of our decentralised electricity market. We must ensure collaboration rather than competition between institutions. We must build alignment instead of regulatory conflict. We must practice mutual respect instead of jurisdictional rivalry,” he said.

Speaking further, Tegbe explained that the Electricity Act did not establish parallel electricity industries but complementary electricity markets operating within one national framework.

“Our objective must therefore be regulatory coherence. Investors should not encounter conflicting rules. Developers should not navigate contradictory approval processes. Consumers should not become casualties of institutional uncertainty. Market participants should enjoy clarity, predictability and confidence wherever they choose to invest,” he added.

Tegbe described the shift from a centralised grid to a decentralised state-led electricity market as one of the most critical economic reforms in Nigeria’s modern history.

He cautioned against regulatory friction, emphasising that the success of the initiative hinges on synergy rather than institutional rivalry.

“The decentralisation of the electricity market should not be viewed as fragmentation. It should rather be understood as the intelligent distribution of responsibilities within one integrated national electricity ecosystem,” he said.