The apex regulator of the electricity industry in Nigeria the Nigeria Electricity Regulatory Commission (NERC) has transferred regulatory oversight of the electricity market in Oyo State to the state’s Electricity Regulatory Commission (OSERC).
This was announced by NERC in a public notice, stating that the action aligns with the provisions of the Electricity Act of 2023 and the 2023 amendments to the Constitution of the Federal Republic of Nigeria.
NERC explained that the Oyo State government, having fulfilled the legal requirements outlined in the Electricity Act of 2023, notified the commission of its intent to regulate the electricity market within the state, which was subsequently approved.
The order states, “In compliance with the amended Constitution of the Federal Republic of Nigeria (CFRN) and the Electricity Act 2023 (Amended), the Nigerian Electricity Regulatory Commission (“NERC” or the “Commission”) has issued an order to transfer regulatory oversight of the electricity market in Oyo State from the Commission to the Oyo State Electricity Regulatory Commission (OSERC).”
“The EA also mandates any state that intends to establish and regulate intrastate electricity markets to deliver a formal notification of its processes and requests NERC to transfer regulatory authority over electricity operations in the state to the State Regulator.”
“Based on this, the Government of Oyo State complied with the conditions precedent in the laws, duly notified NERC and requested for the transfer of regulatory oversight of the intrastate electricity market in Oyo State.”
Operational Guidelines
The transfer order by NERC included several provisions to be fulfilled by the electricity distribution company in charge of Oyo state-
- It directed the Ibadan Electricity Distribution Company (IBEDC) to incorporate a subsidiary, IBEDC SubCo, to take over the responsibilities for the intrastate supply and distribution of electricity in Oyo State from IBEDC.
- IBEDC was mandated to complete the incorporation of IBEDC SubCo within 60 days from August 6, 2024. The subsidiary was required to apply for and obtain a license for the intrastate supply and distribution of electricity from OSERC, along with other directives. All transfers specified by this order were to be completed by February 5, 2025.
Impact of the 2023 Electricity Act on Electricity Market Regulation
Since the assenting of the Nigeria Electricity Act into law, states have begun taking advantage of the legislative provision to enact laws to control the electricity market in their state and attract the needed investments to grow the sector.
Ekiti, Ondo and Enugu states have taken pioneering steps in this regard, and it is expected that the NERC will begin issuing regulatory oversight to more states whose domesticated electricity law is in the pipelines.
