President Bola Tinubu Signs Electricity Act 2023 Into Law
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.
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.
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For now, Lagos, Edo and Kaduna states already have electricity market laws and can start regulating their market.
