Tinubu's Seal of Approval on Nigeria's Electricity Act 2023

President Bola Ahmed Tinubu has given his seal of approval to the groundbreaking Electricity Act 2023, a visionary legislation that was initially endorsed by lawmakers back in July 2022, setting a new course for the Nigerian Electricity Supply Industry (NESI).

A New Era: Replacing the Outdated Power Sector Reform Act

The Electricity Act supersedes the outdated Electricity and Power Sector Reform Act of 2005, providing a comprehensive framework to navigate the post-privatization phase of NESI. This legislation paves the way for private sector investments and injects vitality into the industry.

Under the Act, states, companies, and individuals are empowered to participate in generating, transmitting, and distributing electricity. States can issue licenses to private investors, allowing them to operate mini-grids and power plants within their territories. However, interstate and transnational electricity distribution is limited.

NERC's Expanded Regulatory Powers under the Electricity Act

The Electricity Act augments the powers vested in the Nigerian Electricity Regulatory Commission (NERC). It empowers NERC to regulate the electricity sector within Nigeria while respecting the states' autonomy to establish electricity markets and legislate within their own jurisdictions.

The Act outlines the mechanism for transitioning regulatory responsibilities from NERC to state regulators once they are established. Until then, NERC will regulate electricity business exclusively in states without their own electricity market laws. Lagos, Edo, and Kaduna states have already enacted such laws, enabling them to initiate regulation within their markets. NERC retains its jurisdiction in cross-border matters, overseeing generation and transmission activities across state boundaries.

Legislative Oversight: Lawmakers and NESI Governance

The Electricity Act grants lawmakers the responsibility to conduct comprehensive oversight of NESI through the respective Committees on Power in the Senate and House of Representatives. This oversight is carried out independently of any supervisory authority held by government ministries over enterprises operating within the Nigerian electricity supply industry.

Recognizing the importance of renewable energy, the Electricity Act imposes obligations on electricity generation licensees to meet renewable generation targets as prescribed by NERC. It requires them to generate power from renewable energy sources, purchase renewable energy-generated power, or procure instruments representing renewable energy generation.

The Electricity Act further mandates renewable purchase obligations on distribution or supply licensees, solidifying the commitment to integrating renewable energy across the sector. This step propels Nigeria towards a sustainable and eco-friendly energy landscape.

Nigeria's Future: A Transformed Electricity Sector

With President Bola Ahmed Tinubu's assent to the Electricity Act 2023, Nigeria embarks on a transformative journey, embracing a future where electricity is harnessed efficiently, sustainably, and collaboratively. This legislation not only dismantles monopolies but also empowers states, promotes renewable energy, and fortifies the regulatory framework, thereby setting the stage for a dynamic and vibrant electricity sector that will drive Nigeria's growth and prosperity in the years to come.

By enacting the Electricity Act 2023, Nigeria has taken a monumental step towards modernizing its electricity sector. The vision of a diversified, competitive, and sustainable industry is now within reach, unlocking opportunities for private investments, empowering states and stakeholders, and paving the way for a greener future. With a transformed electricity sector, Nigeria is poised to meet the growing energy needs of its population while embracing sustainable practices and driving economic growth. This privatization may also create a lot of jobs in Lagos and other states in Nigeria.