State Govts. to set up DisCo, GenCo, as N’Assembly sends electricity, 34 other constitution amendment bills to Buhari for assent

Oredola Adeola

The National Assembly has transferred the 35 constitution amendment bills to President Muhammadu Buhari, one of which is the bill that gives power to the state governments to generate, transmit and distribute their own electricity in areas “covered” and “uncovered” by the National grid.

The Senate at its plenary on Tuesday directed the Clerk to the National Assembly, Sani Tambuwal, to transmit the 35 bills – that have so far met the requirement of the provision of Section 9(2) of the Constitution – to the president for assent.

The bill, No 33 (Devolution of Powers, National Grid System) which was passed by the National Assembly in March 2022, Part 1 & II second schedule, therefore alters the provision of the constitution of the Federal Republic of Nigeria, 1999, thereby allowing the state government to generate, transmit and distribute electricity in areas covered by the national grid.

EnergyDay gathered that the bills have been considered by 27 State Houses of Assembly (SHA) and approved by at least 24 state assemblies as required by law.

This provision of the bill and the further assent by the President is a victory for the 36 state governors under the aegis of the Nigeria Governors’ Forum (NGF) who had requested for the unbundling of the centrally controlled electricity market.

The bill has therefore expanded the powers of states to build generation plants, transmission, and distribution lines in ALL areas covered and uncovered by the national grid.

It also removed the dominance of the Federal Government in the Nigerian Electricity Supply Industry (NESI), giving powers to the states to make laws for electricity within their jurisdictions.

The provision of the Electricity bill further reaffirmed the argument of the Governors Forum that the Concurrent Legislative List, through articles 13 and 14 of the Nigerian Constitution, by providing the power to make laws for the generation and transmission of electricity are concurrent.

EnergyDay’s check showed that Rivers, Lagos, Edo, Ekiti, Ondo, and Kaduna have already taken the initiative to enact policy statements and laws for the electricity sectors in their states.

Nasir Ahmad El-Rufai, Kaduna State governor, in a statement made during the 9th Nigeria Energy Conference, revealed the plan by the Northern State Governors Forum (NSGF)consisting of the 19 northern states and the federal capital territory, to form a regional electricity market with the target to achieve 4000MW off-grid electricity by 2023 through the building of 100-megawatt solar plants.

According to him, NSGF has incorporated a special purpose vehicle, the Northern Nigerian Renewable energy Company, to drive regional electricity market.

last week, the Nigerian Electricity Regulatory Commission (NERC) approved the application from Ibom Utility company to operate an independent electricity distribution network licence which will enable Ibom Utility Company to distribute electricity in selected locations in Akwa Ibom state.

EnergyDay gathered that the new Electricity Bill, 2022, after getting the Presidential assent will therefore repeal the Electricity and Power Sector Reform Act, 2005, and enact the Electricity Act.

The act will therefore consolidate all legislations dealing with the electricity supply industry to provide an omnibus and ideal Institutional framework to guide the post-privatization phase of the Nigerian Electricity Supply Industry and encourage private sector investments in the sector.

It will also create a comprehensive legal and institutional framework to guide the Nigerian Electricity Supply Industry (NESI), thereby giving the State Government the power to issue licenses to private investors who have the ability to operate mini-grids and power plants within the State.

The bill, therefore, restricted the State from extending its operations to other states or participate in transnational distribution of electricity.

The Electricity Act will also give the private sector, state governments, and the Federal Government the opportunity to collaborate to solve the issues in the country’s power sector.

By the power of the act, the State House of Assemblies have been given the power to legislate on electricity and whatever law that is made within the scope of the Nigeria constitution, shall not be invalidated.

The Electricity Act following the later assent of the President mandates the Ministry of Power in consultation with relevant Government Authorities and relevant stakeholders to develop an Integrated Electricity Policy and Strategic Implementation Plan. This is specifically meant to guide overall development of the Nigerian power sector and address policy gaps.

The Act when assented later by President Buhari will further widen the scope of the electricity market through the legal backings that would be given to operators in the renewable energy space to generate renewable energy and fully contribute to the market in a sustainable and environmentally friendly manner.

The Act will also retain the provision in section 62 (2) of the extant Electric Power Sector Reform Act that states that mini-grid energy producers who are generating power below 1 megawatt will not need licences to operate.