6 things to know about the new electricity law

President Bola Tinubu signed the Electricity Bill 2021, converting it into an Act of the National Assembly of Nigeria on June 9, 2023.

The Electricity Act 2023 aims to factor in and harmonise all legislations in the Nigeria Electricity Supply Industry, as well as to establish a strong institutional framework to oversee the Nigerian electricity supply industry’s post-privatisation operations while promoting private sector investment in the sector.

Here are six major highlights of the Electricity Law

State power over electricity

The national de-monopolisation of electricity generation, transmission, and distribution in Nigeria empowers states, businesses, and individuals to generate, transmit, and distribute electricity.

States can award licences to private investors to operate mini-grids and power plants within their borders under the Act. The Act, however, prohibits interstate and international electricity delivery.

NERC’s authority

The Nigerian energy Regulatory Commission (NERC) would be able to govern the energy industry within Nigeria under the Electricity Act 2023, without prejudice to states’ authority to pass laws, create electricity markets, and regulate those markets.

The Act specifies how NERC can delegate regulatory authority to state regulators once they are constituted. NERC will continue to regulate energy business, conducted solely in those states until those states’ electricity market regulations are passed.

As of the time of this article, Lagos, Edo, and Kaduna states already have power market regulations in place and may begin regulating their markets. However, NERC will regulate in states where such regulations do not exist. NERC will continue to carry out cross-border rules, regulating generation and transmission across states.

Legislators’ roles

The Act empowers lawmakers to carry out oversight responsibilities and exercise control over the electricity industry through the Senate and House committees on power. This should be done regardless of any government ministry’s supervisory authority over government-owned firms or other entities engaged in the Nigerian energy supply industry.

Increasing the use of renewable energy
Electricity generation licensees are required by NERC to meet renewable generation obligations.

The Act requires electricity-generating firms to create power from renewable energy sources, purchase power generated from renewable energy, or purchase any instrument representing renewable energy generation.

In addition, the Act requires distribution or supply licensees to meet renewable purchase obligations.

Cross-border trading/theft framework

According to the Act, there is a provision of a clear framework for cross-border electricity trading in the interest of national security and energy self-sufficiency.

It also made provision for a framework that will tackle electricity theft and other measures necessary for the security of electricity infrastructure.

Industrial actions resolution

Provisions for a quick and speedy resolution of disputes through the establishment of the Electricity Disputes Appeal Tribunal, increased scope and charges for offences and penalties. The Act also points to the establishment of the federal power task force etc.

Industry operators have said that signing the bill into law is a step in the right direction for the growth of the sector. (BusinessDay)