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President Bola Ahmed Tinubu has signed the Electricity Bill of 2023, which replaces the Electricity and Power Sector Reform Act of 2005 into law.
The newly enacted law de-monopolizes the generation, transmission and distribution of electricity in Nigeria at the national level.
This new law will empower states, companies and individuals to generate, transmit and distribute electricity in the country.
Recall that the Electricity Act of 2023 was originally passed by lawmakers in July 2022 to allow states to issue licenses to private investors who can operate mini-grids and power plants in the state. But the law excludes interstate and transnational distribution of electricity.
The Nigerian Energy Regulatory Commission (NERC) would be able to manage the power industry in Nigeria under the Electricity Act 2023, without prejudice to the power of states to make laws, create and regulate electricity markets.
The law specifies how NERC can delegate regulatory authority to state regulatory agencies once they are established. NERC will continue to regulate the energy business conducted exclusively in these states until the electricity market regulations of these states are approved.
Lagos, Edo and Kaduna states already have electricity market regulations in place and can start regulating their markets.
However, NERC will regulate in states where such regulations do not exist. NERC will continue to implement cross-border rules governing production and transmission between states.
