Market Not Ready: FG Suspends Plan to Hand Over Electricity Supervision to States
Minister of Power, Adebayo Adelabu, has announced the suspension of the transfer of regulatory authority over the electricity sector to state governments. Speaking at the 8th edition of the Africa Energy Market Place (AEMP) conference in Abuja on Friday, May 17, Adelabu explained that the decision was driven by the need for state governments and stakeholders to gain a thorough understanding of the requirements to effectively operate an electricity market.
Adelabu emphasized the importance of a cautious approach, stating that the current market is not mature enough for decentralization. He highlighted that even with a centralized regulatory framework, the sector is facing numerous challenges. Introducing regulatory frameworks across all 36 states would require a highly systematic and strategic approach to ensure the sector’s survival and sustainability.
To facilitate this transition, the minister proposed starting with a pilot program involving a few states. He suggested that these pilot programs should run for three to six months, or even up to a year, to identify and address potential issues before extending regulatory autonomy to additional states. This phased approach would allow for a learning curve, enabling the sector to adapt and improve gradually.
Adelabu clarified that granting regulatory autonomy to a state involves more than just the distribution of electricity; it encompasses regulation across the entire value chain, including generation, transmission, and distribution within the state’s territory, as well as tariff setting. He cautioned that states need to fully understand the financial and operational implications of this autonomy.
Share News with us via WhatsApp: 08163658925 or Email: naijaeyes1@gmail.com
Join Our Social Media Channels:
WhatsApp: NaijaEyes
Facebook: NaijaEyes
Twitter: NaijaEyes
Instagram: NaijaEyes
TikTok: NaijaEyes
