6 Benefits of NERC’s Regulatory Autonomy  for State Governments

The Nigerian Electricity Regulatory Commission (NERC) has recently decided that Imo State can now manage its electricity market.

 This change, confirmed by NERC’s Chairman Sanusi Garba, follows the new Electricity Act 2023. Starting from July 1, 2024, Imo State will join Enugu, Ekiti, and Ondo in overseeing their local electricity services.

 This move aims to let these states monitor their electricity management to better meet local needs and conditions.

Here’s why other states should consider taking control of their local electricity services.

1. Local Control Over Tariffs

 States will be able to establish their own electricity tariffs, allowing them to customise rates to that suites the economic conditions of the state. The purpose of this local control is to increase the responsiveness of power prices to the needs and conditions of the people living in the state.

2. Improved Service Delivery

There is potential for increased efficiency in service delivery when governments manage their local electricity markets. Regulation at the state level will be more flexible and better suited to deal with issues in the energy industry.

3. Economic Development

Autonomy could boost economic development inside states. States that regulate their own electricity markets can attract investments, develop competition, and promote innovation in renewable and sustainable energy. 

4. Responsibility for Infrastructure and Management

States that are currently in charge of the infrastructure, management, and regulatory control in their own areas. This involves everything from electricity production and distribution to infrastructure maintenance and customer service.

5. Accountability

Greater accountability for the supply and caliber of energy services could result from state-level regulation.

local regulators might be more approachable and accommodating to the people they serve.

6. Potential Challenge

While there are many benefits to the regulatory autonomy of states, these benefits also come with challenges. States will need to establish regulatory frameworks and capabilities to manage these responsibilities effectively.

They will also need to ensure that they maintain standards and practices that align with national policies and regulations to ensure consistency and reliability in the broader national electricity market.