State Electricity Regulators Warn 2026 Amendment Bill Will Disrupt Sector Decentralisation, Undo $1bn Capital Investment
• Say Senate committee’s proposed reversals can trigger constitutional crisis, stall reform gains
Peter Uzoho
Sixteen State Electricity Regulatory Commissions (SERCs) have raised strong objections to the proposed Electricity Act Amendment Bill 2026, warning that the legislation seeks to reverse the devolution of powers to states.
They also warned that the move could plunge the country’s power sector back into the regulatory gridlock that stalled progress for 20 years.
The SERCs gave the warning in their memorandum contained in a letter dated May 26, 2026, addressed to Chairman of Senate Committee on Power.
The letter obtained by THISDAY, was jointly signed by the SERC chairmen and chief executive officers in Abia, Anambra, Bayelsa, Edo, Ekiti, Enugu, Gombe, Imo, Kogi, Lagos, Nasarawa, Niger, Plateau, Ondo, Ogun, and Oyo,
The SERCs said a review of the bill showed a clear intention to reconsolidate federal control over electricity matters that were constitutionally within states’ jurisdiction.
They stated that move directly contradicted the 5th Alteration of the Nigerian Constitution and the Electricity Act 2023, which devolved legislative, governance, and regulatory authority for electricity markets operating solely within states.
The SERCs stated regarding the amendment bill, “The general intention is to reverse the devolution of legislative, governance and regulatory powers over electricity matters that occur solely within the respective states to the state governments, in favour of a reconsolidation of powers at the federal level.
“Effectively, it appears that the intention of the Bill is that Nigeria should continue with the same regime that, for twenty years, has not led to any significant increase in power availability of per capita consumption for Nigerians, despite ever increasing and unsustainable federal debt.”
They criticised Section 2 of the bill as “based on a shocking miscomprehension of Nigerian Constitutional Law.”
According to them, the provision attempts to make the National Assembly the source of states’ power to legislate on electricity, requiring the National Assembly approval for State Houses of Assembly (SHA) to make laws.
They stated, “There is no legal framework for the NASS to ‘empower’ state governments to make law by ordinary legislation, as the language of the Bill attempts to do.
“The respective legislative powers of NASS and the SHAs are derived directly from the constitution… This power can only be added to or restricted by constitutional amendment, and not by an Act of NASS.”
The state power regulators warned that the bill’s proviso eliminating Section 2(2) of the 2023 Act — which protected state laws from invalidation — and seeking to prohibit state laws from conflicting with federal provisions, undermined federalism.
They stated that only the courts, not National Assembly, could determine if a state law conflicted with federal law under the “covering the field” doctrine in Section 4(5) of the constitution.
While drawing attention to the risks the amendment could pose to investment and market stability, the SERCs said the proposed amendments threatened over $1billion investments already committed under the 2023 Act.
They stated, “This will defeat the key objectives of the Electricity Act, and the various states’ electricity laws, even before the regime introduced by them has taken any root.
“It will introduce avoidable disruption in the industry as significant investment decisions have already been taken based on the Electricity Act 2023, and which investments are now put at risk.”
The regulators said Proviso (i) in the proposed amendments barred state laws from conflicting with the Act on “activities on the national grid system irrespective of whether such part terminates within a state boundary”. The SERCs said this would strip states of authority over distribution and in-state grid-connected generation, both reserved for state legislation.
According to the regulators, even if limited to the Transmission Company of Nigeria (TCN) network, it effectively meant states were unable to properly legislate on activities of TCN in their states.
While condemning what they described as wholesale market overreach, the SERCs said Proviso (ii) reserved “any aspect of” the National Wholesale Electricity Market for exclusive federal regulation, even for power sold within the same state. They said this unwarranted federal control of market administration could unwind decentralisation.
They insisted that states should be responsible for regulating electricity generated or procured for sale within their respective territories, similar to how ERCOT operated in Texas.
On licensing of mini-grids and independent networks, the SERCs said the bill deleted provisions giving state regulators authority to license mini-grids, Independent Distribution Network Operators, and Independent Transmission Network Operators.
They maintained that state laws, not the Act, granted them the power, and the Nigerian Electricity Regulatory Commission (NERC) had absolutely no regulatory oversight of off-grid mini-grids operating entirely within a state.
On consumer tariffs and subsidies, the SERCs said the bill expanded NERC’s control over the Power Consumers Assistance Fund, including power to determine contributions by “designated consumers”.
They stated that retail supply and tariffs were now state issues, adding that NERC should not have the power to determine contributions to be made to any fund by end-use customers, as supply to them was now regulated by state regulators.
Stating the essential services clause in the proposed amendment, they said Section 228G declared all electricity generation, transmission, and distribution as “essential services”, which could be used to bring tariff regulation back under NERC.
The state regulators stated that the amendment provision appeared to create an avenue for bringing the entire Nigerian Electricity Supply Industry (NESI) within NERC’s regulatory oversight, describing it as invidious, regressive, and saying it should be expunged.
In the area of Forum of Electricity Regulators (FERs), the memorandum said while coordination between NERC and SERCs was needed, the bill’s creation of a statutory FERs with “quasi-regulatory powers” and NERC as final appellate authority on disputes between states was unconstitutional.
According to them, the National Assembly cannot arrogate to NERC quasi-judicial authority over SERCs. They pointed out that the authority to hear and determine civil proceeding was vested by the constitution in the State High Courts.
While calling for coordination, instead of recentralisation, the SERCs said what Nigeria needed was not top-down federal legislation but proper coordination protocols between NERC and state regulators, especially on transmission and grid reliability.
They stated, “Admittedly, because TCN operates across state borders, proper coordination between NERC and state regulators with regards to rules for transmission operation is important. What is required is a proper coordination on transmission matters between NERC and state regulators, and not top-down federal legislation.”
They urged the senate to reject provisions that usurped state powers, warning that reconsolidating federal control would return the sector to the failed model of the last two decades.
With states like Lagos, Edo, and Taraba already enacting electricity laws and licensing operators, the SERCs said the bill risked creating legal uncertainty and deterring private capital at a time when Nigeria needed investment most.