Lagos Shakes Up Energy Sector: NERC Hands Over Electricity Regulation to LASERC

Lagos State assumes control over its electricity market with the establishment of LASERC, marking a significant shift in the country’s energy regulatory landscape.

The Federal Government of Nigeria has officially transferred regulatory oversight of Lagos State’s electricity market to the newly established Lagos State Electricity Regulatory Commission (LASERC). This decision, announced by the Nigerian Electricity Regulatory Commission (NERC), represents a significant shift in the management of electricity services in the state and is part of broader reforms set forth in the Electricity Act of 2023.

This move is aligned with the amended Constitution of the Federal Republic of Nigeria and is part of a broader strategy to empower states to oversee their intrastate electricity markets.

Under the provisions of the Electricity Act 2023, states are now authorized to assume control over their electricity markets once they notify NERC and meet specific requirements. While LASERC will oversee intrastate electricity activities within Lagos, NERC will maintain its role as the central regulator for national and international electricity activities, including generation, transmission, and supply.

Key Provisions for the Transition

NERC has outlined key steps for a smooth transition of regulatory responsibilities:

1. Formation of New Subsidiaries:
   • Eko Electricity Distribution Plc (EKEDP) is required to establish a new subsidiary, EKEDP SubCo, to manage intrastate supply and distribution in Lagos. The incorporation must be completed within 60 days from December 5, 2024.
   • Ikeja Electric Plc (IE) must also form a subsidiary, IE SubCo, to handle intrastate operations, with the same deadline.
2. Licensing Process:
   • Both subsidiaries must apply for operational licenses from LASERC upon their incorporation to ensure compliance with local regulations.
3. Completion Timeline:
   • All regulatory handovers are expected to be completed by June 4, 2025, allowing LASERC to fully assume its oversight role.

The transition marks a significant step toward giving Lagos State more control over its electricity systems. The restructuring of EKEDP and IE into new subsidiaries under LASERC’s oversight will provide greater regulatory clarity and improve oversight over intrastate operations.

The move to localized regulation is part of a wider trend across Nigeria, with other states such as Enugu, Kogi, Ondo, Ekiti, Oyo, and Imo following suit in establishing their regulatory bodies.