By Onu Okorie
The Managing Director/CEO of the NISO has said that millions of households in Nigeria still lack access to reliable electricity. He stated this in a keynote address during the 5th Annual Power Correspondence Association of Nigeria PCAN conference in Abuja yesterday.
According to him, “for many, connection to the grid does not guarantee supply, and for others, the cost of energy remains beyond reach. Energy poverty is not just about a lack of connection; it is about the inability to afford sufficient power for daily life and productive enterprise. It is about children unable to study at night, small businesses unable to grow, and industries forced to rely on costly alternatives.We cannot ignore the fact that rising inflation, unemployment, and declining purchasing power have eroded the capacity of many Nigerians to pay higher tariffs, even when supply improves.
“And yet, without cost-reflective tariffs, our utilities cannot recover costs, investors cannot commit capital, and our electricity infrastructure will continue to deteriorate. The real question, therefore, is not whether we should have cost-reflective tariffs, but how to achieve them in a way that preserves affordability and protects the most vulnerable among us.Finding that balance requires thoughtful, multidimensional strategies.”
He also advocated for a targeted subsidy mechanisms that reach the truly vulnerable, rather than blanket subsidies that distort market signals and sustain inefficiency. Properly designed lifeline tariffs and data-driven welfare-linked rebates can provide real protection for low-income consumers while allowing the market to function efficiently.
“Second, we must confront inefficiency head-on. Reducing technical, commercial, and collection losses is one of the fastest ways to relieve pressure on tariffs. Every percentage point of loss recovered translates directly to lower costs for consumers. This requires renewed focus on metering, automation, data accuracy, and operational discipline across all segments of the industry.”
“Third, transparency must be non-negotiable. The Nigerian Independent System Operator, in its current structure, plays a central role in ensuring that energy is dispatched efficiently, market settlements are transparent, and imbalances are minimized. By improving transparency and operational efficiency, we strengthen investor confidence and ensure that tariff adjustments are grounded on verifiable performance data.”
“Furthermore, as the new Electricity Act empowers states to establish subnational electricity markets, we must embrace embedded and decentralized energy solutions. Encouraging micro-grids, off-grid systems, and embedded generation can reduce transmission losses, improve reliability, and lower the average cost of supply for consumers.Transitioning to a fully cost-reflective tariff should not be abrupt. It must be gradual, deliberate, and linked to visible service improvement.”
He said that Consumers are more willing to pay when they experience reliability and fairness. “Service-based tariffs, coupled with transparent communication and performance-linked adjustments, will foster this trust.” He argued.
The NISO Boss also called for regulatory predictability as crucial in the market.
According to him, “investors, operators, and consumers need certainty. A stable, transparent, and consultative tariff review process by the Nigerian Electricity Regulatory Commission builds confidence and reduces the temptation for political interference.From the perspective of the Nigerian Independent System Operator, our commitment is clear.”
“As the entity responsible for system operation, market coordination, and system planning, we are enhancing transparency, efficiency, and coordination in ways that directly impact market sustainability.
“We are deploying digital platforms that improve visibility of energy flow, generation availability, and settlements. We are upgrading our grid management tools through SCADA and Energy Management Systems to strengthen reliability.
“And as the electricity landscape evolves toward decentralization, NISO is ensuring that state and regional markets remain interoperable, fair, and aligned with national grid objectives.
“We believe that tariff reform and market efficiency are two sides of the same coin. A transparent, data-driven market reduces systemic inefficiencies, narrows the revenue gap, and supports the case for realistic, socially sensitive tariffs.However, achieving the right pricing balance also depends on broader policy alignment. Nigeria must continue to pursue gas pricing reform to lower the cost of generation.”
“We must strengthen data governance to improve forecasting and tariff modeling. Investments in energy efficiency and demand-side management will also play a key role in reducing consumption costs and improving affordability for end-users.
“We must also invest in communication in engaging stakeholders consistently and honestly so that tariff adjustments are understood as necessary reforms for sector stability, not as punitive measures.
Ultimately, our collective goal is not simply to raise electricity prices, but to build a sector that works a sector that can finance its own growth, sustain investor confidence, deliver reliable supply, and ensure that no Nigerian is left in the dark because of inability to pay.”
Speaking at the occasion, the PCAN chairman Mr Obas Esiedesa explained that the theme: “Cost-Reflective Tariff vs. Energy Poverty: Finding a Pricing Balance in Nigeria’s Power Sector” was taken to captures one of the most critical policy dilemmas confronting Nigeria today.
According to him “more than a decade after the privatization of the power sector, this balance remains a formidable challenge.”
He said that the iindustry is still weighed down by an estimated ₦6 trillion debt owed by the Federal Government to power generation companies, a massive liquidity gap across the value chain, gas supply shortages, aging and weak transmission infrastructure, and rising foreign exchange costs that threaten investments and operations.
“While operators demand cost-reflective tariffs as a condition for viability, millions of Nigerians continue to live in darkness or rely on expensive self-generation.” “According to the World Bank, about 85 million Nigerians, roughly 43 percent of our population, still lack access to grid electricity, making Nigeria home to the largest electricity access deficit in the world. This statistic is not just a number; it is a stark reminder of the scale of our national challenge and the urgency of reform.”
