The Minister of Power, Adebayo Adelabu, has announced a suspension on the transfer of regulatory authority over electricity to state governments. This decision was revealed during the 8th Africa Energy Market Place (AEMP) conference in Abuja on Friday, May 17.
Adelabu explained that state governments and stakeholders in the power sector need a better understanding of what it takes to manage an electricity market before they can assume regulatory control. The minister emphasized that the electricity market in Nigeria is not yet mature enough to handle such a transition smoothly.
He stated, “We must tread carefully and not rush this process. The market is not ready. Centralizing regulation under one authority already presents numerous challenges. Decentralizing to create separate regulatory frameworks for each of the 36 states requires a highly systematic and strategic approach.”
Adelabu proposed starting with a few pilot states to test the feasibility of state-level regulatory oversight. “By piloting in a few states for three to six months, or up to a year, we can identify and address potential issues before expanding regulatory autonomy,” he said.
He further clarified that granting regulatory autonomy to states involves comprehensive control over the entire electricity value chain, including generation, transmission, distribution, and tariff setting within their territories. This means states will also have to manage financial responsibilities such as subsidies and tariff regulation.
Adelabu concluded, “We need to ensure everyone fully understands the implications of this autonomy. It’s crucial to determine whether states are ready for full regulatory control or if a phased approach with partial autonomy is more appropriate until the market matures.”
