President Bola Ahmed Tinubu has performed his maiden act of assenting to legislative bills with the executive signature given to the Electricity Bill 2023, which is now an act, thereby repealing the Electric Power Sector Reform Act,(EPSRA) 2005 – that was implemented between 2001 and 2013- and providing the institutional framework for the reform of the Nigerian Electricity Supply Industry (NESI)
The Electricity Act was part of the bills including retirement age and pension rights of judicial officers and other related matters, assented to by President Tinubu on Thursday, exercising the powers vested in him under the 1999 Constitution as amended.
Abiodun Oladunjoye, State House, Director of Information, disclosed this in a statement following the signing of the amendment bill into law on Thursday in Abuja.
EnergyDay gathered that the new act aimed at consolidating all legislations in the power sector into one electricity statute and improve Nigeria’s power generation capacity. It is also expected to decentralise the regulatory capacity of the Nigerian Electricity Regulatory Commission (NERC) thereby providing the states the right to constitute their respective electricity regulations to make law as stakeholders in the Nigerian Electricity Supply Industry (NESI).
Based on the provision of this new act, states like Kaduna, Lagos, and Edo have been given power to effectively regulate the electricity market in the respective state, having created sub-national laws for the power sector.
Other states that are yet to formulate state-owned electricity laws will continue to be regulated by NERC until their respective electricity markets get legislative backings.
The positive side of the provision of the new Electricity Act is that power-generating licensees (GenCos) are obligated to expand or integrate the generation of power through renewable sources as may be prescribed by NERC.
GenCos and other generating companies operating under NESI are therefore mandated to either generate power from renewable energy sources, purchase power generated from renewable energy, or procure any instrument representing renewable energy generation.
This provision is specifically significant to the provisioning environment for renewable energy investors and thereby stimulating investments in the sector.
This will also provide the framework for power diversification through the use of cleaner renewable energy sources such as coal, wind, and sun and ensure a sustainable energy mix.
EnergyDay further gathered that the act will also eliminate current barriers to private sector funds investment across the power value chain, thereby attracting the needed financial facility required to address the current funding gaps confronting the NESI post-privatisation.
The law also makes provisions granting the power to both Federal and State legislators to carry out oversight responsibilities and functions over NESI, through all their respective Committees on power.
The legislative oversight functions would be carried out notwithstanding the supervisory roles of any of the relevant ministries, departments, and agencies.
EnergyDay’s check showed that the unbundling of the power sector and demonopolizing of the regulatory framework through the assent granted to the bill by President Tinubu, is a follow-up to the constitutional amendment assented to by former President Muhammadu Buhari in March 2023.