After Enugu’s tariff cut, DisCos say customers nationwide threaten bill boycott

Electricity distribution companies (DisCos) say customers across Nigeria are threatening to stop paying their bills following a recent electricity tariff cut in Enugu State — a move they claim could destabilise the entire power sector.

On July 21, the Enugu Electricity Regulatory Commission (EERC) slashed the Band A tariff from N209 to N160/kWh, prompting growing demands from consumers in other states for similar reductions.

In a statement on Thursday, Sunday Oduntan, chief executive officer of the Association of Nigerian Electricity Distributors (ANED), said the Enugu action has triggered ripple effects across the country.

“Since the release of the tariff order by EERC for Enugu State residents, the electricity distribution companies in other states have come under intense pressure and scrutiny also to reduce tariffs,” he said.

“Some customers have taken a position that they will no longer pay their electricity bills until tariffs are reduced.”

DisCos say the move by EERC was taken without adequate coordination with the Nigerian Electricity Regulatory Commission (NERC) or other key market players.

While acknowledging that states are now permitted to establish their own electricity markets under recent reforms, ANED warned that “uncoordinated tariff reductions” could break the market’s cost-recovery framework and cripple other stakeholders.

“Such policy actions that do not align with market-wide cost-recovery mechanisms will inevitably result in shortfalls in Disco remittances to the market,” the group said.

“This puts GenCos and other upstream service providers at further financial risks.”

ANED also flagged the potential disruption to the Nigerian Electricity Supply Industry (NESI), saying the liquidity crisis in the sector could worsen.

“Permit us to establish the fact that as service providers, it is our hope and desire that electricity tariff at some point should begin to go down with time,” the group said.

“It is not our intention to make life difficult for our loyal customers… However, the cost-reflective tariff is as a result of the economic realities of our nation.”

The association questioned the EERC’s reliance on federal subsidy policy to justify the Enugu tariff cut, warning that any subsidy regime must be transparent and fully funded.

“Delayed or unfunded subsidies create cashflow disruptions, undermine market confidence, and deepen the existing liquidity crisis across the electricity value chain,” ANED added.

Citing Power Minister Bayo Adelabu, the group said states reducing tariffs must be ready to shoulder the financial burden.

“It is already a fact that the delay in the prompt payment of electricity subsidies has put the generation companies and gas suppliers under severe operational burden due to the almost N5 trillion outstanding to these market participants,” the statement reads.

ANED said while states can now run their electricity markets, many are already burdened by tight budgets and rising governance costs, making it unlikely they can independently fund subsidies.

“We understand that the federal government does not have an elastic subsidy budget. Any tariff reduction following the approach adopted by EERC may further bloat federal obligations,” the group said.

“We believe that the federal ministry of power and the NERC would be watching closely to provide guidance and align state and federal objectives to ensure electricity access is accelerated in a sustainable and affordable manner.”