Ondo State Governor Lucky Aiyedatiwa has signed an amended electricity law that creates a state regulator and sets new rules for investment, metering and electricity infrastructure.
The Ondo State government says the law is intended to strengthen regulation of electricity generation, transmission and distribution within the state and attract more private investment.
Governor Aiyedatiwa signed the Ondo State Electric Power Sector (Amendment) Law, 2026, after it was passed by the state House of Assembly, according to a statement from his chief press secretary, Ebenezer Adeniyan.
The law amends the state's 2020 electricity legislation and brings its framework into line with Nigeria's Electricity Act 2023.
But the development does not mean Ondo is only now gaining control over its electricity market.
The Nigerian Electricity Regulatory Commission (NERC) transferred regulatory oversight of Ondo's intrastate electricity market to the state on 23 October 2024.
Ondo was among the first states to take advantage of the decentralisation introduced by the 2023 law.
What has changed?
The amended law establishes the State Electricity Regulatory Commission, which will oversee electricity activities within Ondo.
Its responsibilities include licensing power generation, transmission and distribution facilities, setting tariffs, regulating access to electricity networks and overseeing mini-grids and renewable energy projects.
The law also provides for a State Independent System Operator and a State Market Operator to manage the technical and commercial sides of the state electricity market.
Under the Electricity Act 2023, states can regulate electricity generation, distribution, supply and trading within their boundaries, while NERC retains responsibility for interstate electricity activities, the national grid and other federally regulated operations.
This means electricity companies operating entirely within Ondo could increasingly deal with state institutions rather than the federal regulator.
NERC says consumers in states that have completed the transition should also direct complaints about issues such as disputed bills, metering delays and poor customer service to their state regulators.
Metering and consumer protectionThe new law makes metering compulsory in both grid-connected and off-grid areas.
Electricity providers will be required to provide appropriate meters, while consumers will have direct service and payment relationships with their electricity providers.
That could help address one of the long-running problems in Nigeria's electricity market: disputes over estimated billing.
However, the law itself cannot guarantee that consumers will receive regular electricity.
Better regulation still depends on investment, available generation, functioning distribution networks and the ability of customers to pay for electricity.
The law also protects transformers, distribution lines and other infrastructure financed by communities, individuals and associations when those facilities connect to the public network.
It creates an offence called "Electricity Infrastructure Expansion Sabotage".
A first conviction attracts a ₦2m fine, plus ₦25,000 for every day a person continues to prevent the connection of certified infrastructure after receiving written notice from the regulator.
More room for private investors
The legislation gives the Ondo State Power Company powers to invest in generation, transmission and distribution.
Its mandate includes mini-grids, independent distribution networks, renewable energy, small hydro projects and other emerging energy technologies.
The law also allows the state government to grant specified exclusivity rights to investors developing electricity and related fuel-supply infrastructure.
It classifies electricity investments by the state, communities, individuals and other recognised stakeholders as "State Protected Investments".
For investors, the key question will be whether these legal protections translate into predictable regulation and commercially viable projects.
Nigeria's power industry has struggled with inadequate generation, gas supply constraints, infrastructure failures, vandalism, debt and weak revenues.
Reuters reported in 2024 that the national grid and electricity infrastructure remained major constraints on reliable power supply.
A wider shift in Nigeria's power sectorOndo's law is part of a broader national move away from a wholly centralised electricity market.
The Electricity Act 2023 and related constitutional changes gave states a route to establish their own electricity markets, including the generation, transmission and distribution of power within their territories.
By May 2026, NERC said 15 states had completed the transition to state-level electricity regulation.
Those states included Ondo, Ekiti, Enugu, Lagos, Ogun, Oyo, Edo, Kogi, Imo, Niger, Plateau, Abia, Nasarawa, Anambra and Bayelsa.Lagos provides an early example of what the new model could look like.
The state has been developing locally regulated power generation and distribution as it seeks to reduce dependence on the national grid.
But the experience also shows that decentralisation does not remove problems such as gas shortages, foreign-exchange exposure, affordability and limited technical capacity.
What does it mean for Ondo residents?
For households and businesses, the immediate effect is unlikely to be a sudden increase in electricity supply.
The more significant change is institutional: Ondo now has a clearer legal framework for regulating its own electricity market and attracting projects outside the traditional national-grid model.
The new framework could create opportunities for communities and private companies to develop mini-grids and other local power projects.
It could also create new regulatory costs and tariff decisions for consumers.
Whether the promised benefits reach households will depend on how the state regulator sets tariffs, enforces service standards and handles complaints.
The Commissioner for Energy and Mineral Resources, Johnson Jaiyeola Alabi, described the governor's assent as a major step towards building a sustainable and investment-driven electricity sector.
He said the law would encourage private investment, strengthen regulation, improve metering and support renewable and alternative energy development.
Those are government expectations rather than evidence of outcomes already achieved.
The next test will be implementation: establishing and staffing the new institutions, publishing clear regulations, licensing operators, enforcing technical standards and ensuring that consumers have effective channels to challenge poor service.
For Ondo residents, the success of the law will ultimately be measured less by the number of institutions it creates than by whether it delivers more reliable electricity at a price households and businesses can afford.
