Minister of Power, Adebayo Adelabu, has declared the suspension of the transfer of regulatory authority to state governments. Speaking at the 8th edition of the Africa Energy Market Place (AEMP) conference in Abuja on May 17, Adelabu explained that the decision stemmed from the necessity for state governments and power sector stakeholders to grasp the complexities of operating an electricity market fully. He emphasized the importance of a thorough understanding of the transfer of regulatory oversight for the longevity and stability of the nation’s power sector.
Adelabu stated, “Therefore, we must proceed cautiously; we should not rush. The electricity market is not yet fully developed. With regulatory authority centralized under a single body, numerous challenges arise. Our intention to establish a regulatory framework across all 36 states demands a highly systematic and strategic approach.”
“We require only a few states as pilots,” he continued, “which is why I have halted further grants of regulatory autonomy to states. By implementing regulatory oversight in select states across various geopolitical zones and allowing it to run for a period of three to six months, or even up to a year, we can address all potential issues and gain valuable insights. This process will ensure a learning curve, allowing for comprehensive understanding and resolution of issues before granting further regulatory autonomy.”
Adelabu elaborated on the implications of state regulatory autonomy, stating, “Regulatory autonomy encompasses more than just electricity distribution; it extends across the entire value chain, including generation, transmission, distribution, and tariff setting within a state’s jurisdiction. Assuming regulatory responsibilities for a state like Lagos, for instance, entails accountability for tariff, subsidies, and ensuring financial settlements on a monthly basis. It is essential for all stakeholders to fully comprehend these implications before proceeding.”
He concluded, “We must collectively assess our readiness for full autonomy or consider partial autonomy as an interim measure until we achieve a mature electricity market.”
