Nigeria's New Power-Market Rules: What Businesses Need to Know
Nigeria's electricity market is changing — and businesses need to know who now regulates their power supply
For years, businesses dealing with electricity problems in Nigeria largely operated within a familiar regulatory structure: deal with the distribution company, and where a complaint could not be resolved, escalate through the Nigerian Electricity Regulatory Commission (NERC).
That structure is changing.
Under the Electricity Act 2023, states can establish and regulate their own electricity markets. As the reform has progressed, regulatory responsibility for intrastate electricity activities has increasingly moved from the federal level to state regulators. NERC said in July 2026 that 16 states had fully transitioned to state electricity regulation, while its August 2026 transfer order for Akwa Ibom added another recent development in the decentralization process.
For a commercial electricity user, the important question is therefore no longer simply:
"What does NERC say about electricity?"
It is increasingly:
"Which regulator has jurisdiction over the electricity activity affecting my business?"
That distinction can affect how businesses understand tariffs, complaints, service issues, electricity projects and their relationship with power providers.
We hear this confusion often in conversations with business owners across Imo, Anambra, Enugu and Rivers states — most are still routing every electricity complaint through the same old channel, unaware that the correct door may have quietly changed.
The short answer
Nigeria is moving from a largely centralised electricity regulatory structure toward a multi-level market in which federal and state regulators have different responsibilities.
NERC continues to oversee areas within its federal jurisdiction, including interstate and national-grid-related electricity activities. States that have assumed regulatory authority can regulate intrastate electricity activities within their jurisdictions, including generation, distribution, supply and trading, subject to the legal framework.
For businesses, this means location matters more than it used to.
A commercial customer in a state with an active state electricity regulator may have a different regulatory and complaints pathway from a similar business in a state that remains under NERC's jurisdiction.
At the same time, this does not mean that NERC has disappeared from Nigeria's electricity market. The federal and state systems are expected to operate alongside one another, with coordination becoming increasingly important. NERC and state regulators established the Forum of Nigerian Electricity Regulators (FONER) in March 2026 as a coordination mechanism for the emerging multi-level market.
What actually changed?
The legal foundation for the change is the Electricity Act 2023.
The Act created a framework under which states can establish their own electricity regulatory authorities and oversee electricity activities occurring within their jurisdictions.
NERC's own explanation of the framework says state electricity regulatory authorities can:
- Regulate intrastate generation, distribution, supply and trading
- Issue or modify licences for intrastate operations
- Approve tariffs for intrastate electricity services
- Enforce technical, safety and service-quality standards
- Protect consumers within the state
Meanwhile, NERC retains federal responsibilities, including electricity activities that cross state boundaries and activities connected to the national grid.
This creates an important distinction for businesses: not every electricity issue is now a NERC issue. The correct regulator can depend on where the business is located and what electricity activity is involved.
What this means for commercial electricity users
The impact is not necessarily that a business suddenly receives a completely different electricity service. The more immediate change is how the electricity market around that business is governed.
There are five areas commercial users should pay attention to.
1. Your state may now matter when resolving electricity disputes
This is one of the clearest practical changes.
NERC says that in states that have transitioned to state electricity regulation, consumers should use their State Electricity Regulatory Commission (SERC) as the relevant regulatory channel for local electricity complaints, rather than escalating those matters through NERC's former forum structure.
The normal first step remains important: customers should generally raise the issue with their distribution company's customer complaints channel. NERC's July 2026 explanation says that in transitioned states, if the local distribution company does not satisfactorily resolve the issue within the applicable 15-day period, the customer should escalate the matter to the relevant state regulator rather than to a NERC Forum Office.
For a business, that means keeping proper records becomes increasingly important.
If you have:
- Disputed bills
- Metering problems
- Service-quality complaints
- Unresolved customer-service issues
- Electricity-related disputes
Keep copies of your bills, meter information, correspondence, complaint references and responses. A documented complaint is much easier to escalate than a verbal complaint that leaves no record.
2. Electricity tariffs need to be understood in context
Another important part of Nigeria's electricity market remains tariff regulation.
NERC continues to publish Monthly Energy Caps and MYTO documents, including September 2026 materials. MYTO — the Multi-Year Tariff Order framework — is part of the regulatory mechanism used to determine electricity tariffs and associated assumptions within the relevant regulatory structure.
But businesses should be careful about treating a single national tariff figure as applicable everywhere. As state electricity markets become operational, jurisdiction matters. NERC's framework states that state regulators can set and approve tariffs for intrastate electricity services within their regulatory jurisdictions.
That means a business evaluating its electricity costs should ask:
Who regulates electricity in my state?
Which tariff or regulatory order applies to my electricity supply arrangement?
What customer category am I in?
What are the applicable service and energy conditions?
This is more useful than relying on a generic electricity-price figure circulating online.
Monthly Energy Caps and MYTO documents" to NERC's current MYTO/Energy Cap
3. Commercial users should pay closer attention to their electricity category
A business should not automatically assume that the rules applying to a household customer are identical to those applying to a commercial customer.
NERC's Customer Protection Regulations define a commercial customer as a customer using premises for non-residential purposes, including businesses, schools, factories, government and other institutional purposes.
That distinction matters because electricity users have different operational requirements. For example, a small shop may primarily worry about lighting, refrigeration, fans, charging and basic equipment — while a larger business may depend on production equipment, cold storage, air conditioning, pumps, servers, security systems and communications equipment.
The cost of an electricity interruption can therefore be very different from one business to another. This is why simply asking "How much is electricity?" is often not enough for a commercial energy decision.
4. Businesses should not confuse grid regulation with their entire energy strategy
This is particularly important.
Changes to electricity-market regulation do not eliminate the underlying operational problem many businesses face: what happens when grid power is unavailable, inadequate or unpredictable?
A business may still need to consider a combination of grid electricity, backup power, solar, batteries, generators, energy-efficient equipment, cooling systems, power-management systems, monitoring, and electrical infrastructure upgrades.
The regulatory environment determines part of the electricity market. It does not automatically determine the best technical configuration for an individual business. That decision should be based on the business's actual load, operating hours, critical equipment, existing infrastructure, energy costs and reliability requirements.
5. The regulatory map is becoming more complicated — not necessarily simpler
Decentralization can create opportunities for states to develop electricity markets around local conditions. But it also means businesses operating across multiple states may have more regulatory information to monitor.
A company with facilities in Lagos, Anambra and Rivers, for example, should not assume that an electricity-market development in one state automatically applies in exactly the same way to its facilities elsewhere.
NERC has recognised the need for coordination between federal and state regulators. FONER was established in March 2026 to support collaboration, knowledge exchange, capacity building and greater coordination across the emerging multi-level electricity market. That coordination will matter particularly to businesses, investors and electricity-sector operators working across jurisdictions.
What commercial users should do now
Businesses do not need to become electricity-law specialists. But they should become more deliberate about understanding their electricity position.
1. Identify your regulator
Find out whether your state has transitioned to a state electricity regulator. NERC has created an official State Electricity Regulatory Commission directory to help consumers, investors and other stakeholders identify their relevant regulator and its official contact channels.
State Electricity Regulatory Commission directory" to NERC's official SERC directory page
2. Know your electricity arrangement
Document your DisCo or electricity supplier, customer classification, meter status, current billing arrangement, electricity consumption, major loads, recurring power problems, and backup systems.
3. Keep evidence of disputes
Do not rely only on phone calls or informal conversations. Keep bills, payment receipts, meter readings, complaint references, emails, letters, photographs where relevant, and responses from the electricity provider.
4. Monitor applicable regulatory changes
Electricity rules, tariffs, orders and market structures can change. NERC currently publishes regulatory orders, MYTO documents, energy caps, reports and other market information through its official channels. Businesses should also monitor the relevant state regulator where applicable.
5. Separate your regulatory problem from your energy-resilience problem
If your electricity bill is disputed, that is one problem. If your business loses money whenever electricity goes off, that is another. The second question requires an operational energy assessment — understanding how much power you need, when you need it, which loads are critical, and what interruptions actually cost, before deciding what backup system to install.
The bigger change businesses should watch
The most important development is not simply that "NERC has new rules." Nigeria's electricity market is becoming more structurally complex. The country is moving toward a system where federal and state institutions have different regulatory responsibilities, while regulators are developing mechanisms to coordinate those responsibilities.
For businesses, the practical lesson is straightforward:
Know your jurisdiction. Know your electricity arrangement. Know who regulates the problem you are trying to solve. And do not treat electricity regulation as the same thing as energy planning.
The latter distinction is particularly important because regulatory reform does not, by itself, guarantee that an individual business will receive the reliability it needs.
What this means for Lavamozu
For a business trying to reduce the operational impact of unreliable or expensive electricity, the first question should not necessarily be:
"Which inverter should I buy?"
It should be:
"What is my actual energy requirement, what is costing me money today, and what combination of grid, backup, cooling, efficiency and other energy solutions makes sense for my operation?"
That is why a proper power assessment comes before equipment selection. At Lavamozu Consult, the objective is to approach energy as a system, rather than simply selling a particular piece of equipment.
Frequently asked questions
Does NERC still regulate electricity in Nigeria?
Yes. NERC continues to exercise federal regulatory responsibilities, while states that have assumed regulatory authority regulate intrastate electricity activities within their jurisdictions.
Does every state now have its own electricity regulator?
No. The transition is ongoing. NERC reported that 16 states had transitioned by July 2026, and subsequent transfer orders have continued to be issued.
Where should a business complain about an electricity problem?
Start with the relevant distribution company's customer complaints channel. In states that have transitioned to state regulation, unresolved local electricity complaints are generally escalated to the relevant state electricity regulator rather than through NERC's former Forum Office route.
Does electricity-market reform mean businesses no longer need backup power?
No. Regulation and energy resilience are separate questions. A business still needs to assess its electricity reliability, critical loads and operational requirements.
Should a business buy solar or an inverter because electricity prices are changing?
Not automatically. Equipment should be selected after assessing the business's actual load, operating pattern, existing electrical infrastructure and backup requirements.
Sources and update history
Primary sources: Nigerian Electricity Regulatory Commission (NERC), including its material on the Electricity Act 2023, state electricity regulation, the State Electricity Regulatory Commission directory, 2026 market orders, MYTO and energy-cap publications.
main NERC source link, e.g. https://nerc.gov.ng]
Last verified: 23 September 2026.
Important: Nigeria's electricity regulatory structure is evolving. Businesses should verify the current regulatory status and applicable orders for their specific state and electricity arrangement before making regulatory or investment decisions.
Get a power assessment
If your business is unsure how the current electricity rules apply to it — or wants to understand what a reliable, cost-effective power setup would actually look like — reach out to the Lavamozu Consult team.
📧 Info@lavamozu.com.ng
🌐 lavamozu.com.ng
Lavamozu Consult Editorial Team
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