Nearly three years after the energy Act 2023 was passed, twenty-one states—including Rivers and Kano—have not yet taken over regulatory authority of their energy markets, despite the fact that fifteen states have already made the switch to independent market supervision.
The states that have finished the transition have set up their own electricity regulatory frameworks and are now in charge of market development, attracting investment, monitoring tariffs, and safeguarding customers within their borders, according to the Nigerian Electricity Regulatory Commission.
The commission claims that the change is in line with the decentralization provisions of the Electricity Act 2023, which give subnational governments the authority to control the production, transmission, and distribution of electricity within their borders following the completion of the required legal and administrative procedures.
Fifteen states have completed the shift to state-level regulation, according to NERC. Enugu, Ekiti, Ondo, Imo, Oyo, Edo, Kogi, Lagos, Ogun, Niger, Plateau, Abia, Nasarawa, Anambra, and Bayelsa are among them.
Adamawa, Akwa Ibom, Bauchi, Benue, Borno, Cross River, Delta, Ebonyi, Gombe, Jigawa, Kaduna, Kano, Katsina, Kebbi, Kwara, Osun, Rivers, Sokoto, Taraba, Yobe, and Zamfara are the 21 states that still lack regulatory authority.
The anticipated advantages of decentralization, such as enhanced power supply, localized pricing structures, and increased investments in embedded generation and mini-grid projects, could be postponed, according to industry analysts, due to the slow pace of transformation in some areas.
After a state completes its transition, the state energy regulator will be responsible for licensing intrastate electrical operations, enforcing technical standards, setting local distribution tariffs, and safeguarding the state’s power consumers.
Only interstate and national grid-related activities are under NERC’s supervision.
The commission emphasized that state regulators are expected to stimulate the expansion of the local electricity market by guaranteeing service quality standards for distribution businesses operating within their jurisdictions, encouraging private sector participation, and promoting the deployment of renewable energy.
According to the commission’s chronology, the first changes took place in October 2024 when the states of Enugu and Ekiti took over regulatory responsibility, with Ondo following soon after. In 2025, the pace quickened as a number of states, notably Oyo, Edo, Lagos, and Ogun, finished their transitions. Between January and February of 2026, Nasarawa, Anambra, and Bayelsa were added.
However, it was noted that not all 15 states had established their regulatory commissions.
Stakeholders in the power industry contend that states that have not yet made the switch run the danger of losing out on chances to draw funding for off-grid electrification projects, especially in underprivileged rural areas.
They also point out that by allowing for more adaptable tariff structures, targeted subsidies, and enforcement methods suited to regional circumstances, state-level regulation could aid in resolving long-standing distribution issues.
Many contended that since fewer than half of the states have finished the transition, the speed at which the remaining states set up their operational frameworks and regulatory institutions will determine how successful the Electricity Act reforms are.
The federal government recently challenged the 36 states to take over power generation, transmission, and distribution, seems overwhelmed by the nation’s power problems.
According to the federal government, this is the only way to address the nation’s electricity issue.
Decentralization and liberalization are two effects of the Electricity Act, according to Power Minister Adebayo Adelabu at an energy summit in Lagos.
“Centralization cannot work for us in a country as large as Nigeria, which has a landmass of nearly a million square kilometers, more than 200 million people, millions of businesses, thousands of institutions (health and educational institutions), 36 states plus the Federal Capital Territory, and 774 local governments. It is impossible to entrust the Federal Government with the duty of supplying reliable electricity.
At the national level, stable power cannot be guaranteed from Abuja. Decentralization is thus one of the things that the Act has accomplished. This has made it possible for all states or subnationals to participate in the generation, transmission, distribution, and even service businesses that support the electricity sector”, he said.
He urged the remaining 21 states to establish their own markets for electricity.
”I believe other states will follow suit in operationalizing the autonomy granted, with full collaboration of the national regulator. To guarantee that the wholesale and retail markets are strongly aligned, we are actively collaborating with these states”, he said.
