Lagos to Regulate Ikeja Electric, Eko DisCo with Electricity Agency as FG Moves to Withdraw Licenses

• Lagos State government said it would establish an electricity regulatory agency to monitor the activities of DisCos in the state
• The state governor, Babajide Sanwo-Olu, stated that the new agency would regulate the activities of the Ikeja Electric and Eko Disco
• This was as the minister of Power, Adebayo Adelabu, ordered NERC to withdraw the licences of non-performing DisCos in Nigeria

Legit.ng’s Pascal Oparada has reported Tech, Energy, Stocks, Investment and the Economy for over a decade.

The Governor of Lagos State, Babajide Sanwo-Olu, says the state will establish an electricity regulatory agency to monitor the activities of electricity distribution companies (DisCos).

During a media chat on Thursday, February 22, 2024, the governor said the agency would be modelled after the Nigerian Electricity Regulatory Commission (NERC).

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He said with the unbundling of the Electricity Act, the state is in a unique position, saying that Lagos is working with the two DisCos in the state.

Sanwo-Olu said:

“We have two distribution companies not entangled with any other state (Ikeja DisCo and Eko DisCo). We’re working with them. We must collaborate with them to have a lasting solution.”

According to the governor, some DisCos are tangled in three states, but Lagos is unique.

According to Sanwo-Olu, Ikeja Electric and Eko DisCo have a significant role in the new plan. He revealed that people want electricity desperately, and they have agreed with the government,

TheCable reports that Sanwo-Olu said the new agency would be backed by a law passed by the state House of Assembly, stating that the state would secure new investments in the generation and distribution sectors immediately after the law is passed.

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Sanwo-Olu stated that the new firms will also have the capacity to grow, and the willing buyer and willing seller concept will come into play, providing more investments in gas and other sources of energy supply.

The state government was ready to facilitate electricity supply, but the governor stated that the state could not continue with the initiative due to the law not allowing new entrants.

FG orders license withdrawal of non-performing DisCos

Sanwo-Olu, however, said the obstacle has been removed with the passage of the Electricity act.

The development comes as the minister of Power, Adebayo Adelabu, reportedly ordered the Nigerian Electricity Regulatory Commission (NERC) to withdraw the licences of non-performing DisCos.

The Sun reports the minister told reporters that he could not understand why Nigeria should be operating between 3,000 and 4,000 megawatts of electricity in the past 50 years after a lot of investment in the power sector.

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In October 2023, Legit.ng reported that the Nigerian Electricity Regulatory Commission (NERC) said that wealthy Nigerians made up the highest consumers of electricity subsidies in Nigeria.

NERC revealed this in its 2022 Market Competition Report released on Wednesday, October 4, 2023, saying that the end-user tariff subsidy in Nigeria was more favourable to the rich as the top income earners in Nigeria consumed more electricity than others.

Also, the commission ordered an increase in the price of pre-paid meters by distribution companies.

Electricity tariff may drop as FG considers fresh subsidy

Legit.ng reported that there were clear signals that the federal government was contemplating a new subsidy for electricity generation companies (GenCos) to mitigate the impacts of the recent increase in gas prices imposed by producers.

It was further reported that the Nigeria Electricity Regulatory Commission (NERC), in collaboration with key stakeholders in the industry, was in the final stages of finalising a new agreement for the sector.

Source: Legit.ng