State electricity markets risk losing investors without harmonised regulations – FCCPC

The Federal Competition and Consumer Protection Commission (FCCPC) has warned that Nigeria’s emerging state electricity markets could struggle to attract investment if states adopt different regulatory frameworks, stressing the need for stronger cooperation among electricity regulators to protect consumers and provide certainty for investors. The Executive Vice Chairman and Chief Executive Officer of the FCCPC, Tunji Bello, gave the warning on Thursday at a stakeholders’ engagement on consumer protection and regulatory cooperation in Nigeria’s electricity sector in Abuja. The meeting brought together officials of the Nigerian Electricity Regulatory Commission (NERC), the Nigerian Electricity Management Services Agency (NEMSA) and several state electricity regulatory commissions following the decentralisation of electricity regulation under the Electricity Act 2023. The electricity act, signed in 2023, ended decades of exclusive federal control of Nigeria’s electricity sector by empowering states to establish and regulate their own electricity markets once they meet constitutional and regulatory requirements. Since then, several states, including Lagos, Enugu, Plateau and Anambra, have established electricity regulatory commissions as part of efforts to improve electricity supply and attract private investment. However, stakeholders have repeatedly warned that inconsistent regulations across states could discourage investment, increase compliance costs for operators and create uneven levels of consumer protection. Consumer confidence Mr Bello described the Electricity Act as one of the most significant reforms of Nigeria’s electricity sector, saying its success would depend largely on effective collaboration among federal and state regulators. “The Electricity Act of 2023 represents one of the most significant reforms of Nigeria’s electricity sector in recent years,” he said. “Beyond creating new opportunities for investment and improved service delivery, it has fundamentally reshaped our regulatory architecture,” he added. According to him, while states now have greater flexibility to regulate their electricity markets in line with local realities, consumers should enjoy the same level of protection regardless of where they live. He noted that electricity users are primarily concerned about reliable service and fair treatment rather than the agency responsible for resolving their complaints. “Consumers experience electricity as one system. When supply is interrupted, or a bill appears incorrect, they are not concerned about which regulator has jurisdiction. They simply expect protection, ensuring that our institutions work seamlessly together in our responsibility and not theirs.” Mr Bello explained that although NERC regulates the electricity industry, NEMSA enforces technical standards, state commissions oversee intrastate electricity markets, while the FCCPC provides economy-wide consumer protection and competition oversight. According to him, these responsibilities should complement rather than compete with one another. “Our objective is to consult, exchange information, support one another’s lawful actions, and ensure consumers receive timely and effective protection,” he said. The FCCPC boss cited the suspension of the proposed replacement of obsolete Unistar prepaid meters in 2024 as an example of effective collaboration among regulators. PREMIUM TIMES previously reported that consumer groups raised concerns over plans to replace obsolete prepaid meters amid fears that electricity customers could be forced to bear the cost or be subjected to estimated billing during the process. Mr Bello said the FCCPC convened discussions involving NERC, NEMSA and electricity distribution companies after the concerns emerged. The replacement exercise was subsequently suspended pending compliance with regulatory requirements before NERC later issued an order providing a structured framework for replacing faulty and obsolete meters. “The order guaranteed that consumers would not bear the cost of replacing obsolete meters, would not experience interruption of electricity supply during the replacement exercise, and would not be subjected to estimated billing because of delays in implementation,” he said. He added: “Those safeguards reflected the principle that consumers should never be disadvantaged because infrastructure has reached the end of its useful life through no fault of their own.” He noted that the effectiveness of regulation should be measured not only by complaints resolved but also by the number of disputes prevented. “Strong regulation is not built on institutional rivalry. It is built on cooperation, mutual respect, and a shared commitment to the public interest,” he said. Investors need certainty Also speaking, NERC’s Assistant Director and Head of Consumer Protection Department, Anthony Essien, said harmonised regulations would become increasingly important as more states establish independent electricity markets. He warned that differing regulations across states could complicate investment decisions and discourage investors operating across multiple jurisdictions. “It would not be easy, especially looking at investors coming in and having different standards across 36 states. But if we come together and foster a unified and well-thought-out effort to bring forward laws, it would further strengthen our mandates across the different states.” He said the FCCPC has become an important partner in NERC’s consumer complaints mechanism and now participates in the commission’s Consumer Complaints Forum. READ ALSO: FCCPC, Lagos consumer agency warn businesses on price tags, refunds, product labelling The Chairman of the Enugu State Electricity Regulatory Commission, Chijioke Okonkwo, described the engagement as timely, saying collaboration with federal regulators would help state commissions strengthen consumer protection. Similarly, the Chairman of the Anambra State Electricity Regulatory Commission, Frank Nwoye Okafor, cautioned that fragmented regulations could become a major obstacle to investment. “The biggest nightmare for an investor is trying to figure out 36 different rules. But if we have this sort of coordination, then we start singing from the same hymn sheet,” Mr Okafor said. The Electricity Act 2023 is regarded as Nigeria’s most far-reaching electricity reform since the power sector was privatised in 2013. By allowing states to regulate intrastate electricity markets, the law seeks to expand electricity access, attract private investment and improve service delivery. However, as more states establish independent electricity markets, regulators and industry stakeholders say harmonised regulations and coordinated oversight will be critical to maintaining investor confidence, avoiding regulatory fragmentation and ensuring consumers receive the same level of protection regardless of where they live. Discover more from Premium Times Nigeria Subscribe to get the latest posts sent to your email.