The Nigerian Electricity Regulatory Commission (NERC) has welcomed the timely assent to the new Electricity Act 2023 by President Bola Tinubu, disclosing that a stakeholders’ workshop will hold next month to iron out the rough edges.
While highlighting the granting of legislative autonomy to the federating states on matters relating to the generation, transmission, and distribution of electricity in their respective jurisdictions, NERC in a public notice, described it as a very significant development.
It stated that the landmark legislations mark a pivotal shift in the structure of the power sector and present the potential of bringing about positive developments needed for powering Nigeria’s economy to greater heights.
While novel to Nigeria, it noted that the model 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 said it recognises the importance of learning from the experiences and lessons of these jurisdictions to navigate the potential challenges and maximise the benefits of the evolving power sector landscape.
To ensure an orderly and successful transition, NERC said that there was the need for the collaboration of all stakeholders and the fostering of a harmonious working relationship.
“ There is a need to provide further clarity and delineation of roles and responsibilities between the federal and state regulatory jurisdictions. The clarification shall assist in avoiding conflicts, overlaps, and regulatory uncertainty that may hinder the smooth functioning of the power sector with a consequential adverse impact on investors’ confidence.
“ In establishing a clear framework and defining the scope of authority for each level of governance, the commission aims to work with all stakeholders to create an environment that promotes efficient and effective sector governance thus benefiting investors and consumers,” it stated.
It maintained that an orderly transition process was required to minimise disruption and shock to market participants and consumers.
“In this regard, stability and clarity are vital for the confidence of existing players and the encouragement of new investors in the evolving market. The commission recognises the importance of working with all state governments on an orderly transition having regard to legacy reform issues and the novation of existing contractual commitments.
“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 to hold in July, with key stakeholders including market participants, state government representatives, and other key interested parties.
“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 multitier electricity markets,” it added.
On June 10, Tinubu assented to the electricity bill, which authorises states, companies and individuals to generate, transmit and distribute electricity.
The new electricity law repealed the Electric Power Sector Reform Act (EPSRA) which was signed by President Olusegun Obasanjo in 2005.
The new Act signed by Tinubu consolidates all legislations dealing with the electricity supply industry to provide an omnibus framework to guide the post-privatisation phase and encourage private sector investments in the industry.
