FG Transfers Electricity Market Regulatory Oversight in Lagos to LASERC

The Federal Government, through the Nigerian Electricity Regulatory Commission (NERC), has announced the transfer of regulatory oversight of Lagos State’s electricity market to the newly established Lagos State Electricity Regulatory Commission (LASERC).

This announcement was made in a statement released by NERC on X (formerly Twitter) on Thursday.

In line with the amended Constitution of Nigeria and the Electricity Act of 2023 (EA 2023), regulatory oversight of Lagos State’s electricity market is now under LASERC’s jurisdiction. This transfer follows the provisions in the Electricity Act 2023, which allows states to take control of their intrastate electricity markets, provided they notify NERC and fulfill the necessary requirements.

While NERC will continue to regulate national activities such as inter-state and international electricity operations, LASERC will now be the primary regulator for Lagos’ intrastate electricity market.

The Lagos State Government has met all the legal requirements outlined in the Electricity Act 2023 to request the transfer of regulatory oversight. After completing the necessary procedures, Lagos officially notified NERC, initiating the process of handing over responsibilities. This transfer reflects the increasing decentralization of regulatory powers within Nigeria’s electricity sector, giving states greater autonomy over their local energy markets.

As part of the transfer, NERC’s Order outlines specific actions to ensure a smooth handover to LASERC. Key provisions include:

• Eko Electricity Distribution Plc (EKEDP): The company has been directed to establish a subsidiary, EKEDP SubCo, which will handle the intrastate supply and distribution of electricity in Lagos. This subsidiary must be incorporated within 60 days from December 5, 2024, after which it will apply for a license to operate under LASERC’s regulations.
• Ikeja Electric Plc (IE): Similarly, Ikeja Electric must set up a subsidiary, IE SubCo, to take over the intrastate electricity supply and distribution in Lagos. This subsidiary must also be incorporated within 60 days, with plans to apply for a license from LASERC.

Completion Timeline and Future Expectations

NERC’s Order specifies that the transfer of responsibilities, including the incorporation of subsidiaries and the licensing process, must be completed by June 4, 2025. This timeline ensures a structured and timely transition to LASERC’s oversight, enabling Lagos State to take full control of its electricity market.

The transfer of regulatory authority marks a significant step in empowering Lagos State to better manage its electricity supply and distribution systems. With LASERC in charge, it is expected that the state will have more flexibility to tailor energy policies to local needs, improving service delivery and stimulating growth in the electricity sector.

The decentralization of electricity market regulation is expected to have a significant impact on consumers and other stakeholders in Lagos State. By transferring oversight to LASERC, the Lagos State Government aims to streamline operations, improve efficiency, and enhance the quality of electricity services. For consumers, this move promises greater accountability and potentially better customer service, as LASERC will be in a better position to address local issues directly.

Additionally, the creation of subsidiary companies by EKEDP and IE represents a major restructuring of the distribution companies. These new entities will be directly accountable to LASERC, ensuring that the state’s regulatory body has full control over intrastate operations.