THE ELECTRICITY BILL: President Bola Tinubu has signed the power law. It was enacted in July 2022 and aimed to repeal the Power and Power Sector Reform Act, of 2005, becoming the Electricity Act.
In order to establish an all-encompassing and optimum institutional framework to direct the post-privatization phase of the Nigerian electricity supply business and promote private sector investments in the sector, the Electricity Act has now consolidated all laws pertaining to the electricity supply industry.
THE BILL
According to the Energy Act, the NERC’s authority to regulate within Nigeria is unaffected by the states’ authority to enact laws, establish energy markets therein, and control such markets.
It specifies how NERC will hand off regulatory duties to state regulators whenever they are constituted. NERC will continue to oversee the manner in which those states conducted electrical commerce until that time.
This means that because states like Kaduna, Lagos, and Edo have already established rules for their electrical markets, they can start to manage their own electricity markets. NERC will continue to regulate the other states until their own laws are established.
The new law restates the situation and makes the state and federal government’s jurisdiction and powers clear. According to an expert who spoke with BusinessDay, it indicates that Nigeria would not have a single market that is regulated from Abuja, but rather at least three separate regulators.
NERC will continue to regulate generation and transmission beyond state lines; these cross-border activities will continue to be governed by NERC.
Through their respective Committees on Power in the Senate and House of Representatives, lawmakers are empowered by the bill to exercise oversight duties and control over the National Electricity Supply Industry.
This must be done despite the fact that no government ministry has the authority to supervise any government-owned businesses or other organizations engaged in the Nigerian energy supply industry.
IMPORTANCE OF THE BILL
The creation of a thorough 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 production, and transmission. And distribution of electricity, enabling States, businesses, and private citizens to do so.
States would also be able to grant licenses to private investors who are qualified to run mini-grids and power plants within their borders. But these licenses would not be valid for the distribution of electricity between states or internationally.
SOME ADVANTAGES OF THE BILL ARE :
1. According to the passage, anyone may build, own, or operate an enterprise. For the generation of electricity with a capacity no greater than one megawatt in aggregate at a site. An enterprise for the distribution of electricity with a capacity no greater than 100 kilowatts in aggregate at a site. Or any other capacity that the Commission may from time to time determine, without a license.
2. Electricity generation license holders are required to meet any requirements for renewable generation set forth. By the Nigerian Electricity Regulatory Commission.
3. Companies that produce electricity will be required to either produce power from renewable energy sources. Or buy power produced from renewable energy sources. Or purchase any equipment that represents the development of renewable energy.
SOME DISADVANTAGES OF THE BILL ARE:
- SOME STATES DO NOT HAVE THE POWER MARKET LAWS IN PLACE
At this time, the states of Lagos, Edo, and Kaduna already have power market laws. And are able to begin regulating their markets. However, NERC will govern other states without such legislation. The generation and transmission of electricity across state lines will continue to be governed by NERC.
States would also be to grant licenses to private investors who are qualified to run mini-grids and power plants within their borders. But these licenses would not be valid for the distribution of electricity between states or internationally.
Although the new act gives power to the NERC. It has more advantages as it is going to improve the state of electricity in all states across Nigeria.
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