The Association of Power General Companies (APGC) has raised serious concerns about the broader consequences of the Enugu Electricity Regulatory Commission's (EERC) recent move to cut electricity tariffs for Band A customers from ₦209/kWh to ₦160/kWh, effective August 1, 2025, warning that the decision could further destabilize Nigeria’s already fragile power sector. Joy Ogaji, Chief Executive Officer of the APGC, described the move as a worrying development that could jeopardize the long-term sustainability of the Nigerian Electricity Supply Industry (NESI), particularly if pressing financial and structural challenges continue to be ignored. She warned that the sector faces a high risk of collapse: “There is no FGN policy on electricity subsidies. What we are witnessing is unchecked debt accumulation,” she said.
Ogaji pushed back against widespread claims that the federal government is actively subsidizing electricity, arguing instead that the current model relies on mounting debt without a viable repayment strategy.
She disclosed that while the average monthly cost of electricity generation is around ₦250 billion, the federal government’s total allocation for the 2025 fiscal year stands at just ₦900 billion, an amount that, as of July 21, 2025, remains unaccounted for. According to the EERC tariff order, the cost of generation is set at ₦112 per kilowatt-hour, but only ₦45 is factored into the consumer tariff. This leaves a 60% gap that is assumed to be government-covered, “despite no clear financing plan or cash backing.”
Ogaji issued a stark warning: “This sets a dangerous precedent, and if this becomes the model adopted by other states, we are heading into a national contagion that must be addressed immediately at the presidential level.”
She further revealed that the GenCos are currently owed approximately ₦4 trillion, ₦2 trillion in unpaid 2024 invoices, ₦1.9 trillion in legacy debts from 2015 to 2023, and another ₦1.2 trillion already accrued for the first half of 2025. This, she said, highlights a severe liquidity crunch that could render power generation companies unable to continue operations.
According to Ogaji, the sector continues to suffer under the weight of "broken promises dating back to the privatisation of the power sector over a decade ago."
