THE BATTLE OF THE KILOWATTS: ENUGU’S TARIFF CUT SPARKS POWER SECTOR WAR

Enugu State’s electricity regulator has ignited a firestorm by slashing the tariff for its highest-paying customers, a move that has sparked outrage from power generators.

The Enugu State Electricity Regulatory Commission (EERC) recently reduced the tariff for Band-A customers from N209/kWh to N160/kWh, a decision met with immediate protest from power generation companies (GenCos).

A representative from the GenCos, Dr. Ogaji, expressed deep concern, questioning who will foot the bill for the significant shortfall.

She argued that the EERC’s decision seems to hinge on a continued subsidy from the federal government, despite the absence of a clear policy on electricity subsidies and the fact that the N900 billion budgeted for 2025 is not yet guaranteed.

The GenCos’ spokesperson also pointed out a major flaw in the EERC’s calculations. The new tariff assumes a generation cost of just N45/kWh, which is only 40% of the actual average cost of N112/kWh.

This leaves a massive 60% gap, which the EERC appears to be banking on an unreliable federal subsidy to cover.

This move comes at a time when the power sector is already struggling under a mountain of debt. The GenCos are owed an estimated N4 trillion in legacy and current debts, with an additional N1.2 trillion piled up in the first half of 2025 alone.

With no clear plan to address this debt crisis, the GenCos believe the EERC’s decision is only adding to the sector’s instability and making it even less attractive to investors.

In addition to the Band-A tariff cut, the EERC also froze tariffs for Bands B, C, D, and E customers, effective August 1, 2025.