Tinubu assents to Electricity bill – Report

President Bola Tinubu has assented to the electricity bill, which was passed in July 2022 seeking to repeal the Electricity and Power Sector Reform Act, 2005 and now Electricity Act, BusinessDay reports.

The Electricity Act is aimed at consolidating all legislations dealing with the electricity supply industry to provide an ideal Institutional framework to guide the post-privatization phase of the Nigerian Electricity Supply Industry and encourage private sector investments in the sector.

The creation of a comprehensive legal and administrative framework to direct the Nigerian Electricity Supply Industry (NESI) is the fundamental goal of the bill, as stated in its very first section.

It eliminates the national monopoly on the production, transmission, and distribution of electricity, enabling States, businesses, and private citizens to do so.

States would also be able to issue licenses to private investors who have the ability to operate mini-grids and power plants within the State. Still, such State licenses are not to extend to inter-state or transnational distribution of electricity.

According to the Electricity Act, the NERC’s authority to regulate within Nigeria is unaffected by the states’ authority to enact legislation, establish energy markets, and oversee such markets.

It prescribes how NERC will transfer regulatory obligations from itself to state regulators whenever they are formed. NERC will continue to control all electricity-related activities carried out in those states until that time.

This means that states like Kaduna, Lagos, and Edo have already established rules for their electrical markets, they can start to manage their own electricity market. NERC will continue to regulate the other states until their own laws have been passed.

The new legislation restates the situation and makes clear the federal and state governments’ jurisdiction and powers. According to a specialist who spoke with BusinessDay, this suggests that Nigeria will not have just one market under the control of Abuja, but rather at least three independent regulators.

The Electricity Act also requires that distribution or supply licensees be required to make renewable energy purchases.

Additionally, it states that no license is required for anyone to build, own, or operate an undertaking for the generation of electricity at a site with a capacity no greater than 1 megawatt (MW) or for the distribution of electricity at a site with a capacity no greater than 100 kilowatts (Kw) or any other capacity the Commission may from time to time determine.