FG, NASS Back Complementary Regulation as NERC Unveils Grid Audit Guidelines

Federal government officials and members of the National Assembly have reaffirmed their commitment to fostering collaboration between federal and state electricity regulators. This emphasis comes as Nigeria navigates its transition towards a decentralized electricity market. The Nigerian Electricity Regulatory Commission (NERC) also unveiled new guidelines mandating periodic technical audits of the national transmission network.

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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.

These points were highlighted at a workshop in Abuja focused on "Legal, Policy and Regulatory Harmonisation Between Federal and State Institutions on the Decentralisation of the Nigerian Electricity Supply Industry (NESI)." Participants underscored the critical role of effective coordination among regulators in sustaining a unified electricity market.

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Our responsibility is to ensure that these questions are resolved through dialogue, cooperation and mutual respect. The Electricity Act decentralises aspects of governance. It does not decentralise the physics of electricity.

Mr. Rilwan Lanre Babalola, Special Adviser to the President on Power, described electricity as fundamental to industrialization, economic competitiveness, job creation, and national prosperity. He urged stakeholders to view the ongoing reforms as a collaborative effort toward a single Nigerian electricity market, rather than institutions competing over regulatory jurisdictions. Babalola noted that while reforms create new interfaces and questions regarding regulatory boundaries, these should be resolved through dialogue and cooperation.

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Our networks remain interconnected. Our markets remain interdependent. Our prosperity remains shared. That is why harmonisation is not optional. It is fundamental to preserving one efficient Nigerian electricity market.

Senator Enyinnaya Abaribe, Chairman of the Senate Committee on Power, stated that the legislature would continue to support legal frameworks enabling complementary functions between federal and state regulators. He stressed that the success of decentralization should be measured by the achievement of a coherent, efficient, and integrated electricity market, where federal and state institutions work together rather than compete. "We therefore require harmonised rules governing the relationship between NERC and State Electricity Regulatory Commissions," he added.

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Ultimately, the success of decentralisation should not be measured merely by the number of States that established electricity markets or obtained 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.