Nigeria: Fifteen states now manage their own electricity markets
Approximately 15 states in Nigeria now have the regulatory authority over the electricity sector, marking a significant step toward improving electricity service delivery across the country.
The move allows the states to establish localized frameworks for energy production, distribution, and pricing, offering increased autonomy and the potential for tailored solutions to meet specific regional needs. By managing electricity markets independently, these states aim to create a more competitive environment, improve efficiency, and promote the use of renewable energy sources. This trend reflects a broader shift toward decentralized energy governance in response to evolving economic and environmental priorities.
According to data from the Nigerian Electricity Regulatory Commission (NERC), Bayelsa is the most recent state to gain this autonomy, making the transition on February 20, 2026.
The remaining states are preparing to meet the necessary requirements and transition into regulatory control by 2026. Under this arrangement, State Electricity Regulators (SERs) will take on vital roles in fostering local market growth, attracting investments, and ensuring better customer protection.
The Nigerian Electricity Regulatory Commission (NERC) confirmed these developments, stating: “States are taking charge! Under the Electricity Act of 2023, 15 states have successfully transitioned to regulating their electricity markets.” The timeline for these transitions has also been outlined, showing both completed and upcoming schedules.
The timeline of transitions by states are: Enugu — 22 Oct 2024; Ekiti — 22 Oct 2024; Ondo — 23 Oct 2024; Imo — 31 Dec 2024; Oyo — 5 Feb 2025 and Edo — 20 Feb 2025.
Others area: Kogi — 12 Mar 2025; Lagos — 4 June 2025; Ogun — 23 June 2025; Niger — 9 July 2025; Plateau — 12 Sep 2025; Abia — 24 Dec 2025; Nasarawa — 3 Feb 2026; Anambra — 1 Jan 2026; and Bayelsa — 20 Feb 2026.
These SERs have become increasingly important, especially after the unbundling of the Power Holding Company of Nigeria (PHCN) and the formation of NERC. Their key mandates are centered on ensuring fair electricity pricing, enhancing service quality, and encouraging investments at the state level.
Nigeria’s 1999 Constitution (as amended) in Paragraph 14(b) Part II of the Second Schedule, alongside Section 2(2) of the Electricity Act of 2023, grants states the legal framework to develop and regulate their own electricity markets.
However, these powers can only be exercised upon passage of relevant laws by each state’s House of Assembly. This enables states to oversee power generation, transmission, and distribution within their jurisdiction. This shift signifies a move from a centrally regulated electricity sector to a dual-tier structure. This structure includes a Federal Electricity Market (FEM) managed by NERC and powered by generation companies (GenCos) connected to the national grid operated by the Independent System Operator.
Alongside this is the newly established State Electricity Market (SEM), supplied by state-based GenCos or FEM and managed by state regulatory authorities. As such, under this framework, NERC continues to regulate FEM, while state-level regulators oversee SEM operations.
To facilitate this transition, NERC has issued transition orders that shift regulatory oversight to each state’s electricity market. Minister of Power Adebayo Adelabu has called for careful planning as states gradually assume regulatory autonomy.
He has urged caution, emphasizing that states should not rush into taking control without addressing critical prerequisites such as robust infrastructure, effective frameworks to prevent issues like energy theft and vandalism, and ensuring sufficient capital for maintaining their electricity systems.
While states now enjoy greater legal authority over their electricity markets, the Minister of power, Honourable Adelabu reiterated the importance of collaboration between states and the federal government to maintain stability in the national grid. This synergy is seen as crucial for the success of Nigeria’s two-tier electricity regulatory framework.
