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Electricity Act 2023: States begin moves to establish utility commissions

By Adewale Sanyaolu

There are strong indications that various State Governments as federating units under the constitution may have begun moves to establish their various utility commissions in line with the recently assented Electricity Act 2023.

President Bola Tinubu, had recently assented to the electricity bill, which authorises states, companies and individuals to generate, transmit and distribute electricity.

The new electricity law repeals the Electric Power Sector Reform Act (EPSRA) signed by President Olusegun Obasanjo in 2005.

Prior to now, state governors have canvassed the need to liberalise the electricity industry to allow them generate, transmit and distribute electricity as part of efforts to improve the living conditions and the economic status of their States.

They argued that a situation whereby the distribution, transmission and generation of electricity was concentrated at the centre was not good the country’s economy

The new  Act consolidates and updates several specific laws relating to the Nigerian Electricity Supply Industry, the Act dovetails with the recent constitutional amendment (5th Alteration Act, 2023).

Of particular reference is the grant of legislative autonomy to the federating states on matters relating to the generation, transmission, and distribution of electricity in their respective jurisdictions.

But to ensure an orderly transition and collaboration, the Nigerian Electricity Regulatory Commission (NERC) has concluded arrangements for a stakeholder workshop in July.

NERC explained that in pursuit of bringing to effect the laudable provisions of the electricity industry laws and to facilitate a smooth transition, the Commission has scheduled a stakeholders workshop with key stakeholders including market participants, state government representatives, and other key interested parties.

According to NERC, The workshop shall serve as a platform for open dialogue and collaboration,enabling participants to discuss and commence the development of a robust roadmap for a successful implementation of multi[1]tier electricity markets. This proactive approach shall allow the Commission and other stakeholders to gather valuable insights, address concerns, and ensure the smooth implementation of the provisions of the new legislation.

The Commission said it welcomes the passage of the Electricity Act 2023 noting that it supports the prospect of a wide range of new initiatives at the sub-national level.

These landmark legislations according to NERC mark a pivotal shift in the structure of the power sector and present the potential of bringing about positive developments needed for powering our economy to greater heights.

‘‘The constitutional amendment and the passage of the Electricity Act 2023 signify a paradigm shift in the

Nigerian power sector. It is envisaged that this new legislation will lead to a sustainable improvement in the Nigerian Electricity Supply Industry and the overall  economic growth of the country,’’.

NERC explained that the regulation of public utilities at the sub-national  level introduced by the recent constitutional amendment and the Electricity Act 2023, while novel to Nigeria, has been successfully implemented in other jurisdictions including India, Australia, Canada, and the United States of America, where federal and state electricity regulation and markets are clearly delineated.

‘‘The  Commission recognizes the importance of learning from the experiences and lessons of these jurisdictions to navigate the potential challenges and maximize the benefits of the evolving power sector landscape.

The Commission has identified collaboration as key to maximizing the potential benefit of the provisions of the legislation. We envisage that, in the short/medium term, all states of the Federation may establish public utility commissions charged with responsibility for regulating the electricity market within their respective jurisdictions.

To ensure an orderly and successful transition, there is an imperative for the collaboration of all stakeholders and the fostering of a harmonious working relationship. The alignment of efforts and resources towards the shared objective of providing efficient service to all electricity customers requires stakeholders to leverage on their collective expertise to drive progress and achieve the goals set forth by the new legislation,’’.

 

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