The Law and Power Supply: The Nigerian Electricity Act

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 Written by Esther Ukpong


In the Nigerian legal system, law serves to regulate various activities, including the equal distribution of amenities. Recently, the Nigerian power supply laws have experienced a drastic change, a change which may cause radical changes in the country's distribution of power supply.

Photo Credit: The Guardian Nigeria

On Friday, June 9, 2023,  His Excellency, President Bola Ahmed Tinubu signed into law the Electricity Act 2023. The Act was made to replace the Electricity and Power Sector Reform Act (EPSRA) which was signed into law in 2005 by former President Olusegun Obasanjo.

As opposed to the EPSRA 2005, which created a single electricity market with one sole regulator, the new Act seeks to liberalise the power sector by enabling states, companies and individuals to produce, transmit and distribute electricity. The Act also provides for state to issue licenses to private investors who can operate mini-grids and power plants within the state.

The Act places the Nigerian Electricity Regulatory Commission (NERC) as the regulator of the Nigerian electricity sector and they can surrender regulatory responsibilities to a state, only when it has passed its electricity market laws.

Photo Credit: Vanguard News

For now, only three states, Lagos, Edo and Kaduna have electricity market laws and can start regulating their markets. The remaining states would continue to have their electricity generation and transmission regulated by the NERC. 

Companies and individuals licensed to generate electricity under the new law bears the responsibility to meet renewable generation obligations as may be prescribed by the NERC.

The main aim of the bill is to create a legal and institutional framework to guide the Nigerian Electricity Supply Industry (NESI).



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