By Faridat Salifu
The Enugu Electricity Regulatory Commission (EERC) has defended its recent electricity tariff review, stating it is necessary to build an efficient and investor-attractive power market for Enugu State.
EERC Chairman/CEO, Chijioke Okonkwo, made this known during an appearance on News Central’s Business Edge, where he explained the technical basis of the tariff adjustments.
Okonkwo said the Commission reviewed MainPower’s tariff using indices such as generation cost, transmission cost, regulatory asset base, capital expenditure (CAPEX), operating expenditure (OPEX), allowable distribution loss, and cost of capital.
He explained that while national generation costs average around ₦112 per unit, the actual cost of power delivered to Enugu through EEDC is much lower, approximately ₦45, especially with the recent addition of the Zungeru Hydropower Plant.
According to Okonkwo, EERC chose to reflect the real cost of energy delivery into Enugu, not the national generation average, in its tariff model.
He said the Commission maintained the full transmission cost and agreed with MainPower on its regulatory asset base and CAPEX figures after a thorough validation process.
The EERC boss also noted that the Commission allowed for distribution losses above current levels to encourage operational efficiency and enable MainPower to retain more revenue as an incentive.
He said the resulting average tariff was ₦94, which was then broken down across the various customer bands adopted by MainPower, rather than the traditional residential, commercial, and industrial categories.
Addressing the issue of lifeline customers, Okonkwo stated that many consumers classified as lifeline were not genuinely eligible, especially those on Band A feeders who were already paying higher rates.
He said the tariff structure is designed to promote competition, ensure fair returns for investors, and reflect actual service delivery within the state.
The Commission also projected that Enugu’s electricity demand would grow significantly, targeting 300 megawatts (MW) by 2026 and 700MW by 2031.
Okonkwo said EERC’s policy aims to position electricity as a tradable commodity, allowing competition and investor participation to drive development.
He noted that achieving the 700MW target would require attracting industries and investors willing to leverage the available power for business growth.
According to him, Enugu will offer contract-driven power projects that ensure investors receive adequate returns, helping to grow a stable state-specific power market.
The tariff review and growth projections come amid Nigeria’s decentralization of its power sector through the Electricity Act 2023, signed by President Bola Tinubu in June 2023.
The new law allows states to regulate electricity within their territories, repealing the 2005 Electric Power Sector Reform Act.
Since its passage, over 16 states have begun enacting electricity laws and establishing state regulatory commissions.
Despite this, the Nigerian Electricity Regulatory Commission (NERC) recently clarified that state regulators cannot unilaterally reduce electricity tariffs for power drawn from the national grid.
