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Article summary
- President Tinubu has assented to the 2023 Electricity Act which is a replacement for the Electricity and Power Sector Reform Act of 2005.
- The Act will bring about the de-monopolization of Nigeria’s electricity generation, transmission, and distribution of electricity at the National level and empower states, companies, and individuals to generate, transmit and distribute electricity.
- The Electricity Act was first passed in July 2022 under the Muhammadu Buhari administration.
President Bola Ahmed Tinubu has assented to the Electricity Act 2023 which was initially passed by lawmakers in July 2022.
The Electricity Act will replace the Electricity and Power Sector Reform Act of 2005. It provides a framework to guide the post-privatization phase of the Nigerian Electricity Supply Industry (NESI) as well as encourage private sector investments in the sector.
Highlighted below are some of the functions the Electricity Act seeks to guide-
State electricity empowerment
The de-monopolization of Nigeria’s electricity generation, transmission, and distribution of electricity at the National level empowers states, companies, and individuals to generate, transmit and distribute electricity.
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Under the Act, states can issue licenses to private investors who can operate mini-grids and power plants within the state. However, the Act precludes interstate and transnational electricity distribution.
Powers of NERC
Under the Electricity Act 2023, the Nigerian Electricity Regulatory Commission (NERC) will be able to regulate the electricity sector within Nigeria without prejudice to the powers of the states to make laws and create electricity markets within those states and to regulate those markets.
The Act mandates how NERC can transition regulatory responsibilities from itself to state regulators when they are established. Until a state has passed its electricity market laws, NERC will continue to regulate electricity business exclusively carried out in those states.
For now, Lagos, Edo and Kaduna states already have electricity market laws and can start regulating their market. But for other states without such laws, NERC will regulate. NERC will still carry out cross-border regulations – generation, and transmission across states will still be regulated by NERC.
Role of lawmakers
The Act grants lawmakers the power to carry out oversight responsibilities and function over the NESI through its respective Committees on Power in the Senate and House of Representatives. This is to be carried out notwithstanding the supervisory powers of any government Ministry over government-owned enterprises or other entities operating in the Nigerian electricity supply industry.
Empowering renewable energy
Electricity generation licensees are obligated to meet renewable generation obligations as may be prescribed by NERC. Under the Act, electricity generating companies will be mandated to either generate power from renewable energy sources, purchase power generated from renewable energy or procure any instrument representing renewable energy generation.
The Electricity Act also mandates the imposition of renewable purchase obligations on distribution or supply licensees.
What you should know
The Act 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 NERC may determine from time to time, without a license.
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This is good….I believe Nigeria would soon get there. The secrecy associated with electricity reform has gone FOREVER…
A president that keeps to promise is truly a hope for Nigeria.
This is beautiful to watch. Can’t wait for such transformations to come to life in our time.
Let’s keep it hopes high
This is a come development. I strongly believe that any government who is able to successfully resolve the mystery surrounding electricity in Nigeria is a government of the people and should be largely supported by all and sundry.
I can imagine how this loudable achievement would impact real estate in Nigeria.
We the good people of Ekakpamre community welcome this good gestures from Mr President. We hope delta state government will act quickly and pass electricity market laws to help them regulate the market leaving NERC out the running of our state power companies like Lagos and the others.
This is a good development. It will go a long way to solve power epilepsy in the country. Kudos to the the initiators of the bill and to Mr. President that signed it in to law.
Nice one
With such law Nigeria will soon leave the era of darkness to light
What then did Buhari signed?
Insecurity Bill, hunger bill and unemployment
Buhari didn’t sign the law , he simply passed it thru the law maker’s in July 2022..BAT has finally signed it into law, meaning that it has finally come into existence after it has been asserted to…Kudos to H.E.BAT, he has 1nce again done wat other past leaders failed to do….Nigerians will soon start celebrating the good deeds of this present govt under President Tinubu..
This is a welcome development. It will enhance growth in the power sector and if properly followed to the letter by individuals, private organisations and states in the federation the problem of electricity will be a thing of the past in Nigeria.
That’s rhe way to go!
This will be a real game changer for the Nigerian power sector.
A clearly good start.
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