ENUGU, Nigeria (VOICE OF NAIJA) – President Bola Tinubu has reportedly assented to the electricity bill, which was passed in July 2022, voiceofnaija.ng has gathered.
The bill was seeking to repeal the Electricity and Power Sector Reform Act, 2005, and thus becoming the Electricity Act.
Sources inside the villa told Business Day that the Electricity Act now consolidates all legislations dealing with the electricity supply industry to provide an omnibus and ideal Institutional framework to guide the post-privatization phase of the Nigerian Electricity Supply Industry and encourage private sector investments in the sector.
It was learnt that the primary aim of the bill, as stated in its very first section, is to create a comprehensive legal and institutional framework to guide the Nigerian Electricity Supply Industry (NESI).
The bill also de-monopolizes the generation, transmission, and distribution of electricity at the National level, to empower States, companies and individuals to generate, transmit and distribute electricity.
Also, States would be able to issue licenses to private investors who have the ability to operate mini-grids and power plants within the State, but such State licenses are not to extend to inter-state or transnational distribution of electricity.
“This is the culmination of two years’ work, to update the electricity law and bring it in line with what the constitution actually provides,” one source said.
Nigeria’s constitution as amended provides for shared power between the Federal and state government in terms of making laws for electricity.
But this is not the practice on account of the Electricity Reform Act which empowers NERC to carry out regulation across the country.
Nigeria’s journey to this current status started first with clarifying the position of the constitution that recognises joint regulatory powers that led to the constitutional amendment assented to in March by former President Muhammadu Buhari.
The Electricity Act establishes that NERC’s powers to regulate within Nigeria are without prejudice to the powers of the states to make laws and create electricity markets within those states and to regulate those markets.
It mandates how NERC is transition regulatory responsibilities from itself to state regulators when they are established. Until that happens, NERC will continue to regulate electricity business exclusively carried out in those states.
This means that states like Kaduna, Lagos, and Edo can begin to regulate their own electricity market. as they have already created laws for their electricity markets. The other states will continue to be regulated by NERC until they passed their laws.
Meanwhile, the new law restates the position and clarifies the authority and powers of the states and federal. It means that Nigeria will not have one single market regulated from Abuja, but could have at least 3 independent regulators, one expert told BusinessDay.
The Electricity Act also mandates the imposition of renewable purchase obligations on distribution or supply licensees.
It also states that anyone may construct, own or operate an undertaking for generating electricity not exceeding 1 megawatt (MW) in aggregate at a site or an undertaking for distribution of electricity with a capacity not exceeding 100 kilowatts (Kw) in aggregate at a site, or such other capacity as the Commission may determine from time to time, without a license.