Expressing dissatisfaction with the effectiveness of the Independent Electricity Distribution Network and distribution franchisee models established by the Federal Government through the Nigerian Electricity Regulatory Commission, state governors have called for action.
The governors have urged State Electricity Regulatory Commissions to develop new models that promote competition among companies in the retail electricity sector and address the nationwide issue of poor power supply.
In a report by NewsNow on January 16, 2024, it was revealed that the Federal Government, via NERC, granted 13 new licenses for off-grid and embedded power generation, independent electricity distribution, and electricity trading in the third quarter of 2023.
Furthermore, NERC licensed 17 Independent Electricity Distribution Network providers by the end of 2022, as reported in October 2023, with 10 of the networks operational at that time, enhancing competition and operational efficiency.
In their recent document regarding the power sector, titled ‘Development of the National Integrated Electricity Policy and Strategic Implementation Plan Policy Recommendations by State Governments,’ submitted to the Federal Ministry of Power, the state governors emphasized the ineffectiveness of the IEDNs.
Empowered by the Electricity Act 2023, state governments can now oversee and regulate their own electricity markets independently of the Nigerian Electricity Regulatory Commission, a federal agency.
Describing the IEDNs and distribution franchisee models as outdated, the governors emphasized the need for State Electricity Regulatory Commissions to develop new retail and supply licenses and business models to introduce competition and enhance service quality.
They also proposed the establishment of electricity cooperatives to enhance electricity access and reliability for end-users, especially in underserved rural and peri-urban areas.