Misconceptions Surrounding the New Electricity Distribution Licenses in Lagos State

In recent weeks, there has been widespread misunderstanding regarding the licensing of two new electricity distribution companies in Lagos State.
Many analyses have incorrectly suggested that Eko Electricity Distribution Company (EKEDC) and Ikeja Electricity Distribution Company (IKEDC) have become defunct or ceased to exist.
This interpretation is entirely inaccurate, a close review of the Nigerian Electricity Regulatory Commission (NERC) order that transferred regulatory oversight of the Lagos electricity market to the Lagos State Electricity Regulatory Commission (LASERC) provides clarity.

Lagos State is, in fact, the first and only state to have received two official transition orders:

1. Order No. NERC/2024/112 — for Eko Electricity Distribution Company
2. Order No. NERC/2024/113 — for Ikeja Electric

The NERC directive states that:

“Where a State takes the steps provided in subsection (2), the Successor Company shall, upon receiving formal notification from the Commission:

a. Within two (2) months of receiving the said notification, incorporate a subsidiary electricity distribution company under the Companies and Allied Matters Act (the Additional Successor Company); and

b. Transfer the assets, liabilities, employees, and relevant contractual rights and obligations of the Successor Company in that State (the Transfer).”

In compliance with this regulatory requirement, NERC ordered that within 60 days of the effective date which was December 5, 2024, both EKEDC and IKEDC must incorporate subsidiary entities to assume responsibility for intra state electricity supply and distribution in Lagos State.

Accordingly:

1. Eko Electricity Distribution Company incorporated Excel Electricity Distribution Limited on February 11, 2025.
2. Ikeja Electric incorporated IE Energy Lagos Limited on February 5, 2025.
   Given that Ikeja Electric’s network extends into Ogun State, the company also registered IE Energy Ogun Limited to comply with similar regulatory requirements there.

Therefore, Excel Electricity Distribution Limited and IE Energy Lagos Limited are subsidiary companies of EKEDC and IKEDC respectively, established solely to fulfill the transitional and regulatory provisions outlined in NERC’s orders.

Following the distribution licenses given by the Lagos State Electricity Regulatory Commission (LASERC), all regulatory interactions within Lagos State distribution network will now be conducted between LASERC and the two new subsidiary companies: Excel Electricity Distribution Limited and IE Energy Lagos Limited rather than directly with EKEDC and IKEDC.

It is also important to note that EKEDC and IKEDC still retain their NERC licenses, which authorize them to procure power from the National Grid and allocate it to their respective subsidiaries. The new SubCos do not have direct Power Purchase Agreements (PPAs) with the Nigerian Bulk Electricity Trading Plc (NBET).

While the launch ceremony held at Radisson Blu Hotel, Ikeja, was a well deserved celebration of this regulatory milestone by the Lagos State Electricity Regulatory Commission, it inadvertently fueled public misunderstanding. The event did not mark the creation of new independent DisCos but rather the licensing of subsidiary companies of the existing DisCos, a necessary step in implementing the Lagos State electricity market transition framework as directed by NERC order on transfer of regulatory oversight and granting autonomy to the Lagos State Electricity Regulatory Commission.