The Nigerian Electricity Regulatory Commission (NERC) intensified regulatory oversight of the power sector in the third quarter of 2025, issuing 47 orders, approving captive and mini-grid permits, certifying meter service providers and advancing the transfer of electricity market regulation to states.
According to NERC’s Q3 2025 quarterly report, the Commission relied heavily on orders to guide licensees, manage tariff adjustments, strengthen grid operations and implement the evolving structure of Nigeria’s electricity market under the Electricity Act (EA) 2023.
Under its tariff oversight mandate, NERC issued three sets of supplementary orders to the 11 electricity distribution companies (DisCos) in July, August and September 2025.
The orders were designed to reflect changes in pass-through indices outside the control of licensees, including inflation, exchange rate movement, available generation capacity and gas prices, for the determination of cost-reflective tariffs.
However, the Commission noted that pursuant to a Federal Government policy directive on electricity subsidy, end-user tariffs for July, August and September 2025 were frozen at the rates payable in July 2024, despite the underlying cost reviews carried out during the quarter.
Beyond tariffs, NERC issued orders on the delineation of assets and liabilities between DisCos and their constituent SubCos, effective from August 1, 2025.
The Commission said the orders aimed to confirm the allocation of core and non-core assets, regulatory asset value bases, legacy commitments and contractual obligations, in line with provisions of the EA.
According to the report, the delineation exercise is intended to provide economic data for states to undertake rate-making for SubCos, enable ring-fenced operations in states yet to transition and ensure clarity in the treatment of receivables, payables and taxes.
The Commission added that the process was expected to promote accountability, auditability and investor confidence through transparent and verifiable data.
“Directives issued by the Commission are general instructions to licensees to guide them on how to comply with regulatory instruments such as Orders and Regulations. For reporting purposes, Rectification Directives (RDs) are treated as enforcement instruments and thus are covered under the enforcement section of the report,” NERC stated.
In line with the decentralisation framework introduced by the Electricity Act, NERC also transferred regulatory oversight of the intrastate electricity market in Nasarawa and Bayelsa states to their respective state regulators during the quarter.
The transfer to the Nasarawa State Electricity Regulatory Commission was effective on August 4, 2025, while that of Bayelsa State took effect on August 21, 2025.
As part of the transition arrangements, Abuja Electricity Distribution Company and Port Harcourt Electricity Distribution Company were each mandated to incorporate subsidiaries within 60 days to assume responsibility for intrastate electricity supply and distribution in Nasarawa and Bayelsa states, respectively.
On grid operations, the Commission issued an Order mandating the implementation of Free Governor Control (FGC) across all generating units, effective on September 1, 2025.
NERC said the measure is aimed at improving grid stability, enhancing compliance with the Grid Code and ensuring adequate provision of primary reserves. The Order also establishes penalties for non-compliance by generation companies.
