10 Benefits of Electricity Act 2023 Signed into Law by Tinubu

President Bola Tinubu has assented to the electricity bill, which was passed in July 2022 seeking to repeal the Electricity and Power Sector Reform Act, 2005, which makes it become the Electricity Act.

The Electricity Act will henceforth solidify all legislations that handle the electricity supply industry to provide an inclusive and ideal institutional framework to control the post-privatisation phase of the Nigerian Electricity Supply Industry and encourage private sector investments in the sector.

The primary aim of the bill, as stated in its very first section, is to create a comprehensive legal and institutional framework to guide the Nigerian Electricity Supply Industry (NESI).

Based on the objectives of the Electricity Act, there will be de-monopolization of Nigeria’s electricity generation, transmission, and distribution of electricity at the National level, to empower states, companies and individuals to generate, transmit and distribute electricity.

Below are 10 benefits of the assented 2023 Electricity Act

1. The passage means that anyone may construct, own, or operate an undertaking for generating electricity not exceeding one megawatt in aggregate at a site, or an undertaking for distribution of electricity with a capacity not exceeding 100 kilowatts in aggregate at a site, or such other capacity as the Commission may determine from time to time, without a licence.

2. Electricity generation licensees are obligated to meet renewable generation obligations as may be prescribed by the Nigerian Electricity Regulatory Commission.

3. 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.

4. Lawmakers are granted 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.

5. Empowerment of states, companies, and individuals to generate, transmit and distribute electricity.

6. States can regulate their electricity markets by issuing licences to private investors who can operate mini-grids and power plants within the state. However, the Act precludes interstate and transnational electricity distribution.

7. The Nigerian Electricity Regulatory Commission will be able to regulate the electricity sector within Nigeria.

8. The commission can transition regulatory responsibilities from itself to state regulators when they are established.

9. Until a state has passed its electricity market laws, NERC will continue to regulate electricity businesses in such states.

10. For now, only three states -Lagos, Edo and Kaduna—have electricity market laws and can start regulating their markets. But for other states without such laws, NERC will regulate their electricity generation and transmission.

June 10, 2023