michael dada
Under the Electricity Act 2023, states can establish their own electricity markets and assume regulatory oversight from the Nigerian Electricity Regulatory Commission (NERC).
After Akwa Ibom State formally requested regulatory oversight of its electricity market, NERC began the process of transferring regulatory functions to Akwa Ibom State Electricity Regulatory Commission (AKSERC) under the Electricity Act 2023.
The order, which took effect on 18 August 2026, signals the commencement of the transition to a state electricity market.
However, regulation alone, without market development, will not solve the underlying problems of energy security, energy access, and affordability.
It’s like having a driver’s licence without having access to a car.
The licence gives you the authority to drive, but it does not solve your transportation problem if you still depend on public transport or borrowed vehicles.
Also, a regulatory transition is not an immediate transfer of control over electricity infrastructure or availability.
So, what does this order mean for Akwa Ibom State?
Energy security and availability
Will the NERC Order immediately make more electricity available in Akwa Ibom State?
No.
Energy security depends on the entire electricity value chain including gas payment security, available generation capacity, adequate transmission infrastructure, and an efficient distribution network.
In an interview with the National Association of Energy Correspondents (NAEC), the Managing Director of Ibom Power, Engr. Camillus Umoh, disclosed that the state-owned Ibom Power plant has been unavailable for most of the year, recording only 26 days of operation out of 365 days due to gas supply constraints.
This means more than 100MW of the plant’s generation capacity that could be made available to the state has remained largely stranded, weakening electricity availability in the state.
Similarly, in a press release dated 14th of August 2026, the Transmission Company of Nigeria (TCN) announced the severe vandalism of twelve (12) transmission towers along the Ikot Abasi – Eket line, disconnecting several local government areas in the state from power supply.
The dilemma is that power that would have been evacuated through the affected transmission line was rerouted, improving supply in some parts of the state while leaving other parts without electricity pending TCN’s repairs.
As explained by the AKSERC Chairman and Chief Executive Officer, Arit Uya, regulation does not generate electricity or rebuild transmission infrastructure.
The regulator creates the enabling environment for investors and market participants to thrive.
Therefore, transfer of regulatory oversight would not suddenly make more electricity available in the state.
Energy access
Is PHEDC gone?
Will Akwa Ibom people immediately have greater access to electricity?
No. Again, not immediately.
The Order requires Port Harcourt Electricity Distribution Company (PHEDC) to incorporate a subsidiary electricity distribution company for Akwa Ibom State to be licensed by AKSERC.
Under the existing framework, PHEDC and other regional electricity distribution companies in Nigeria receive daily electricity nomination from the national grid.
According to PHEDC, its allocation is approximately 6% of average available generation on the national grid.
For illustration, if the average available generation is 4,000MW, a 6% allocation would amount to about 240MW.
If that amount is divided equally among PHEDC’s four states, Akwa Ibom’s indicative share would be about 60MW.
Meanwhile, the maximum load demand of only 5 electricity distribution feeders in Uyo transmission substation alone is about 61mw.
Unless additional generation or alternative supply arrangements are developed, transferring regulatory oversight would not automatically increase the volume of electricity available to the state.
Also, electricity distribution relies extensively on physical infrastructure like poles, wires, transformers, and substations.
Therefore, it is regarded as a natural monopoly.
So even when Akwa Ibom receives transfer of regulatory oversight, PHEDC still retains ownership and control of the distribution network through its wholly owned state-based subsidiary.
Consequently, the main change is regulatory proximity and accountability, with AKSERC responsible for regulating the intrastate market and resolving electricity-related disputes within Akwa Ibom State.
Energy affordability
Like Enugu, will AKSERC immediately reduce electricity tariff?
That’s unlikely.
AKSERC’s primary objective is not simply to reduce electricity tariffs but to create an efficient, sustainable, and viable electricity market.
Distribution tariffs are designed to recover the cost of energy delivered, the distribution Use of System (DUoS) charge, such as the cost of installation and operation of the distribution infrastructure, and other approved statutory charges, including regulatory levies, taxes, and market related fees.
So, when the Enugu Electricity Regulatory Commission (EERC) ordered the state’s Disco, MainPower, to reduce the Band A tariff from N209/kWh to N160/kWh by cutting NERC’s approved cost of energy from N112/kWh to N45/kWh, NERC raised concerns.
NERC argued that because Enugu still relies on electricity supplied through the national grid, EERC could not unilaterally reduce the cost of energy delivery.
EERC has since complied with NERC’s position and reverted to the previous tariff.
Similarly, the primary sources of bulk electricity supply to Akwa Ibom are Ibom Power and transmission infrastructure connected to the national grid.
AKSERC, as a state electricity regulator, has no jurisdiction over grid-connected operations.
Therefore, it can not unilaterally reduce electricity tariff without considering the cost of energy delivery from the national grid.
Again, the transition raises questions of how ATC&C losses and electricity subsidies would be treated under the new state electricity market.
NERC’s Q1 2026 report shows that PHEDC had ATC&CC losses of about 36%.
Although losses are unevenly distributed across the four states served by PHEDC, assuming this 36% loss is divided equally, that is, 9% losses being transferred to the proposed Akwa Ibom State sub-disco.
In addition, PHEDC has a monthly tariff shortfall of about N10bn as of July 2026.
This translates to about N2.5bn monthly subsidy obligation per state.
The shortfall is the difference between the cost-reflective tariff and the allowed tariff.
Under this arrangement, about 50% – 60% of electricity cost is paid by customers while 40 – 50% is covered under the FGN subsidy.
If federal subsidy is no longer available, would Akwa Ibom consider providing the subsidy, improving distribution efficiency to reduce losses, or implement cost reflective tariff?
Implementation of a cost-reflective tariff does not automatically mean the tariff would increase.
At most, it could be at the current Band A tariff, but a drastic reduction in electricity tariff following the transfer of regulatory oversight is unlikely.
Again, as the Chairman of the AKSERC stated, the transition work continues in stages, and Akwa Ibom State electricity distribution customers should expect a transition rather than a sudden change.
In conclusion, NERC’s order transferring regulatory oversight to Akwa Ibom is significant, but the transfer alone does not automatically solve the underlying challenges in the state’s power sector.
It does not automatically guarantee gas supply for Ibom Power, improve electricity evacuation, reduce distribution losses, or make electricity cheaper.
