The Nigerian Independent System Operator (NISO) has advised that electricity tariffs should only become fully cost-reflective through a gradual process tied to measurable service improvements across the power value chain.
Speaking during a stakeholder engagement in Abuja, NISO Managing Director, Engr. Solomon Adewumi, said the organization supports tariff reform but cautioned that Nigerians must see clear upgrades in electricity supply, billing accuracy, and metering before higher rates can be justified.
He noted that Nigeria’s power market is in transition, following the unbundling of the Transmission Company of Nigeria (TCN) and the creation of NISO as a separate entity under the Electricity Act 2023. The goal, he said, is to ensure transparency, grid stability, and fair access for all market participants.
According to Adewumi, the transition to cost-reflective pricing is inevitable but must be “orderly, equitable, and tied to service outcomes.” He added that a phased approach would prevent unnecessary hardship for consumers and help distribution companies strengthen infrastructure.
NISO also called on the Nigerian Electricity Regulatory Commission (NERC) to continue aligning tariff adjustments with verified improvements in generation and distribution efficiency. The operator stressed that performance-based pricing is essential to restore public trust in the sector.
Analysts say NISO’s position reflects a pragmatic balance between the needs of investors and the realities faced by Nigerian consumers. While cost-reflective tariffs are key to attracting investment, abrupt changes without better power supply could fuel discontent and erode confidence in the reform process.
Experts further noted that the establishment of NISO marks a significant shift toward accountability and grid independence, which could eventually drive more reliable electricity delivery nationwide. If properly managed, the agency’s oversight role could anchor long-term stability in Nigeria’s evolving electricity market.