Power Sector Shift: 17 States Take Control of Electricity Regulation

The Nigerian Electricity Regulatory Commission (NERC) has approved 17 states to regulate electricity markets within their territories.

The move marks a major step towards decentralising Nigeria’s power sector under the Electricity Act 2023.

Akwa Ibom State is the latest to join the growing list of states taking control of their electricity markets.

NERC had confirmed that 16 states had fully transitioned to state-level regulation as of July 22, 2026. The addition of Akwa Ibom brings the number to 17.

However, Akwa Ibom is expected to complete its transition by February 2027.

Under the new system, state regulators will oversee electricity generation, distribution and supply within their territories.

NERC will continue to regulate federal and interstate electricity activities, including transmission, international generation and system operations.

In Akwa Ibom, NERC has directed Port Harcourt Electricity Distribution Plc (PHEDC) to create a subsidiary known as PHEDC SubCo.

The new subsidiary will handle intrastate electricity services across Akwa Ibom.

PHEDC has 60 days from August 18, 2026, to incorporate the subsidiary. It will then apply for an operating licence from the Akwa Ibom State Electricity Regulatory Commission (AKSERC).

NERC ordered that all related transfers in the state must be completed by February 17, 2027.

The decentralisation drive gained momentum after the Electricity Act 2023 replaced the previous system, which concentrated regulatory powers in NERC.

States including Ogun, Edo, Oyo, Kogi, Plateau, Nasarawa, Bayelsa and Anambra have already assumed regulatory responsibilities.

NERC has also released a directory of State Electricity Regulatory Commissions to help consumers, investors and other stakeholders identify the appropriate regulator in each state.

Industry observers believe state-level regulation could improve electricity services by allowing governments to develop policies based on their specific energy needs.

The new system could also attract more private investment and improve electricity distribution.

However, concerns remain over the ability of some state regulators to manage the new responsibilities effectively.

Stakeholders are now watching to see whether the decentralisation will lead to better electricity supply or create additional regulatory challenges.