Lagos State has officially taken a monumental step toward energy autonomy. With the transfer of regulatory oversight of its electricity market from the Nigerian Electricity Regulatory Commission (NERC) to the newly established Lagos State Electricity Regulatory Commission (LASERC), the state has taken its destiny into its hands.
This historic shift, guided by the Electricity Act 2023 and recent constitutional amendments, empowers the state to regulate its intrastate electricity market. A move expected to enhance service delivery, attract investment, and address the unique energy needs of Nigeria’s commercial nerve centre.
As part of this transition, Eko Electricity Distribution Plc (EKEDP) and Ikeja Electric Plc (IE), two of Lagos’ primary electricity distribution companies, are mandated to establish new subsidiaries, EKEDP SubCo and IE SubCo, dedicated exclusively to managing electricity supply and distribution within the state.
According to detailed guidelines obtained by BusinessDay, these subsidiaries must be incorporated within 60 days from December 5, 2024, and secure operational licenses from LASERC. The full transition, encompassing all regulatory and operational adjustments, is slated for completion by June 4, 2025.
The decentralization of electricity regulation aligns with broader efforts to reform Nigeria’s power sector. The sector has been long plagued by inefficiencies, inadequate supply, and poor infrastructure.
By granting states greater control over their electricity markets, the federal government aims to foster localized solutions tailored to regional demands. For Lagos, Nigeria’s most populous state and economic hub, this development is seen as a game-changer.
Speaking at a recent event marking the transition, Biodun Ogunleye, Lagos State Commissioner for Energy and Mineral Resources, lauded NERC’s role in facilitating the process.
“This is a historic moment for Lagos. We are ready to leverage this opportunity to improve electricity services, drive economic growth, and ensure a reliable power supply for our residents and businesses,” Ogunleye said.
He emphasized that the state’s commercial significance and high energy demand necessitate a bespoke approach to electricity management, which LASERC is poised to deliver.
Implications for Lagos’ power sector
The shift to state-level regulation promises a host of benefits, including improved service delivery, faster response times to outages, and greater accountability from distribution companies. With LASERC now authorized to issue licenses and oversee operations, the transition also paves the way for increased private sector participation.
Analysts predict that this could spur investments in infrastructure upgrades, renewable energy projects, and technological innovations, critical steps toward addressing Lagos’ chronic power shortages.
“This decentralization is long overdue,” said Tolu Adebayo, an energy analyst at Sofidam Capital. “By allowing states to take charge of their electricity markets, we can create more efficient and responsive systems that cater to local needs. Lagos, with its massive population and economic activity, stands to benefit immensely.”
Adebayo noted that the creation of EKEDP SubCo and IE SubCo would enable the distribution companies to focus exclusively on Lagos, potentially improving operational efficiency and customer service.
Industry experts have hailed the move as a significant milestone in Nigeria’s quest to resolve its longstanding electricity challenges. Lagos, which accounts for over 30% of Nigeria’s electricity consumption, has historically grappled with unreliable power supply despite its economic importance.
The state government has expressed optimism that LASERC’s oversight will lead to a more customer-focused and resilient electricity market.
Meanwhile, although the transition offers immense opportunities, it is not without hurdles. EKEDP and Ikeja Electric face the complex task of transferring assets, staff, and technical systems to their new subsidiaries within the stipulated timeline. This process will require meticulous planning to avoid disruptions in service delivery.
Additionally, LASERC must establish robust regulatory frameworks and oversight mechanisms to ensure compliance and maintain stability during the handover.
LASERC has sought to allay concerns, assuring stakeholders of its commitment to providing technical and logistical support throughout the transition.
“We are working closely with EKEDP and Ikeja Electric to ensure a seamless process,” a LASERC spokesperson said. “Our priority is to minimize any impact on consumers while building a stronger, more efficient electricity market.”
As the June 2025 deadline approaches, the success of Lagos’ transition could serve as a blueprint for other states seeking to assert control over their electricity markets. States like Rivers, Oyo, and Kano have expressed interest in similar reforms, with analysts suggesting that a decentralized approach could unlock Nigeria’s full energy potential.
For now, all eyes are on EKEDP and Ikeja Electric to deliver on this ambitious plan, with Lagos poised to set a precedent for the nation.
For residents and businesses in Lagos, the transfer of regulatory oversight to LASERC represents a beacon of hope. Improved electricity services could bolster economic activity, enhance quality of life, and position the state as a leader in Nigeria’s evolving power sector. With less than three months until the full transition, the clock is ticking for Lagos to turn its vision of energy autonomy into reality.
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