NERC SAYS NIGERIANS MUST PAY FOR POWER AS COMMISSION PUSHES MARKET SUSTAINABILITY

The Nigerian Electricity Regulatory Commission has rejected the idea that electricity should be provided to Nigerians free of charge, stressing that consumers must pay for power if the sector is to remain financially sustainable.

NERC Commissioner for Legal, Licensing and Compliance, Dafe Akpeneye, made the position known during a breakout session titled “Let There Be Light” at the Nigerian Bar Association Annual General Conference.

Akpeneye explained that the electricity value chain involves significant costs, from generation and transmission to distribution, making payment by consumers essential to keeping the industry operational.

He compared electricity consumption to the purchase of petrol, arguing that consumers understand they must pay before receiving fuel and should similarly recognise the commercial nature of electricity supply.

According to the commissioner, investors would be discouraged from putting money into the power sector if they could not recover the cost of generating and delivering electricity to consumers.

He disclosed that generating capacity comes with substantial investment costs, noting that a 10-megawatt power plant could cost about $10 million, while the construction of transmission lines also requires significant financial commitments.

Akpeneye, however, acknowledged the need to protect vulnerable electricity consumers. He said government must establish appropriate mechanisms to ensure that people who cannot afford higher electricity costs are protected without undermining the commercial sustainability of the wider power market.

The commissioner also blamed some of the challenges in the electricity sector on prolonged disputes over tariff reviews. He said a lawsuit filed in 2016 stalled NERC’s ability to review electricity tariffs for about four years, contributing to a major revenue shortfall in the sector.

He said the experience encouraged NERC to improve engagement with the judiciary and ensure that stakeholders better understand the technical and commercial realities involved in electricity regulation.

Akpeneye further raised concerns about the decentralisation of electricity regulation, warning that the emergence of different regulatory systems across states could create additional complications for investors and electricity companies.

He argued that electricity networks were originally designed around serving customers rather than following state boundaries, making coordination important as Nigeria develops a more decentralised power market.

The NERC commissioner also called for stronger enforcement against electricity theft and other forms of indiscipline within the sector, insisting that there must be consequences for actions that undermine the electricity market.

Speaking at the same event, the Deputy Vice-Chancellor of Afe Babalola University, Ado-Ekiti, Prof. Damilola Olawuyi, said inadequate electricity supply was affecting several areas of national life, including the administration of justice.

Olawuyi noted that modern courts increasingly depend on electricity to operate computers, digital recording equipment and electronic case-management systems, meaning unreliable power supply could disrupt judicial proceedings.

He urged policymakers to pursue comprehensive reforms that would make the electricity sector attractive to investors, while improving infrastructure, addressing insecurity and ensuring that power purchase agreements are predictable and enforceable.

The discussions highlighted the need to strike a balance between affordable electricity for consumers and the financial sustainability required to attract investment and improve power generation, transmission and distribution across Nigeria.