Williams Kayode
Nigeria’s power generation companies (GenCos) have opposed the Enugu Electricity Regulatory Commission’s (EERC) decision to reduce Band A electricity tariffs from N209/kWh to N160/kWh, describing the move as unsustainable and harmful to the nation’s already fragile power sector.
In a statement on Monday, the Chief Executive Officer of the Association of Power Generation Companies (APGC), Joy Ogaji, said the tariff cut sets a dangerous precedent for other states and fails to reflect the true cost of electricity generation.
EERC had announced that the new rate, which will take effect from August 1, 2025, was a cost-reflective adjustment based on Federal Government subsidies for power generation. However, Ogaji challenged this claim, warning that there is no official subsidy in place, but rather a mounting debt burden that leaves GenCos vulnerable.
“It is imperative to state that there is no FGN policy on subsidies. It is a debt accumulation,” Ogaji stated, criticising the commission’s assumption that N45 per kWh of the actual generation cost of N112 per kWh would be covered by federal intervention.
She warned that the move deepens uncertainties in Nigeria’s decentralised electricity market and could deter investors.
Ogaji also noted that the power sector is currently owed over N4 trillion, while the 2025 national budget allocation of N900 billion for electricity support is grossly inadequate, as monthly generation invoices alone average N250 billion.
Meanwhile, stakeholders have raised concerns over the legality and sustainability of the subsidy implied by EERC’s tariff order, particularly after the Nigerian Electricity Regulatory Commission (NERC) removed similar subsidies in April 2024.