Electricity Companies Struggle as Enugu Tariff Cut Triggers Payment Crisis

Electricity distribution companies across Nigeria are facing growing resistance from customers who are refusing to pay their bills.

This backlash follows a recent decision by the Enugu State Electricity Regulatory Commission (EERC) to slash Band A tariffs from ₦209 per kilowatt-hour to ₦160/kWh. The development is now threatening to destabilize the already fragile national power sector.

The Discos, under the Association of Nigerian Electricity Distributors, said many customers in other parts of the country have begun to demand similar tariff reductions. Some have gone further by stopping payments entirely, claiming it is unfair to be charged more than what Enugu residents now pay. Power firms are now under pressure to respond, while also warning of the consequences.

The Chief Executive of the association, Sunday Oduntan, raised concerns that such reactions could disrupt the sector’s cash flow and weaken its ability to maintain power supply. He said the move by EERC has created unrealistic expectations among consumers who do not understand the structure of electricity pricing, which is based on cost-reflective tariffs linked to economic conditions like inflation and exchange rates.

According to him, the cut in Enugu was not coordinated with the Nigerian Electricity Regulatory Commission (NERC) or other stakeholders in the power market. This lack of alignment, he said, is fueling confusion and putting the entire system at risk. The Discos argued that unplanned reductions could distort pricing structures and make it harder to manage the electricity supply chain.

They pointed out that Enugu’s new pricing model is relying heavily on federal subsidies to reduce rates. But the Discos warned that these subsidies are not always reliable. Delays in payment have already resulted in unpaid debts of nearly ₦5 trillion owed to power generation companies and gas suppliers, creating a domino effect that could collapse the system.

Oduntan referenced earlier statements from the Minister of Power, Bayo Adelabu, who stated that states wanting lower tariffs must be ready to shoulder the financial burden themselves. The Discos echoed this, adding that most states are already under pressure from the current economic situation and may not be able to take on additional costs.

They called for stronger cooperation between the Federal Ministry of Power, NERC, and state regulators to avoid future policy clashes. The group insisted that while affordable power is a shared goal, it must not come at the cost of the entire electricity market’s survival. They stressed that any tariff reduction must be backed by a clear, transparent, and fully funded subsidy plan.

On its part, the EERC defended its decision, saying the new tariff only applies to MainPower, the electricity provider in Enugu State. The commission said it did not alter the national cost of power generation and has ensured that all delivery charges and related costs are fully accounted for in its new rates.

EERC also stated that MainPower’s cost data did not justify maintaining the old price. It said the new tariff still allows the company to recover its investment and earn a fair return. The regulator insisted that its goal is to build a power market in Enugu that is transparent and sustainable, and that the reduction was based on detailed reviews of the utility’s operations.

The tariff cut in Enugu has now sparked a wider debate about how electricity should be priced in Nigeria and who should bear the cost of making power more affordable. Unless state and federal authorities quickly align their strategies, Discos fear that widespread customer resistance could weaken the power sector even further.