Six Facts About The New Electricity Acts That You Must Know

President Bola Tinubu has given assent to the Electricity Act, which replaces the 2005 Electricity and Power Sector Reform Act.

The bill intends to promote private sector investments in the Nigerian power sector and de-monopolise the nation’s electricity generation, transmission and distribution at the national level.   Below are six benefits of the 2023 Electricity Act.

Only three states have electricity laws

For now, only three states -Lagos, Edo and Kaduna—have electricity market laws and can start regulating their markets. But for other states without such laws, NERC will regulate their electricity generation and transmission.

Lawmakers granted oversight function

Lawmakers are granted the power to carry out oversight responsibilities and function over the NESI through its respective Committees on Power in the Senate and House of Representatives.

An  Individual can generate up to one megawatt

The passage means that anyone may construct, own, or operate an undertaking for generating electricity not exceeding one megawatt in aggregate at a site, or an undertaking for distribution of electricity with a capacity not exceeding 100 kilowatts in aggregate at a site, or such other capacity as the Commission may determine from time to time, without a licence.

 Generating companies to generate power from renewable energy

Electricity generating companies will be mandated to generate power from renewable energy sources, purchase power generated from renewable energy or procure any instrument representing renewable energy generation.

States can regulate their electricity market

States can regulate their electricity markets by issuing licences to private investors who can operate mini-grids and power plants within the state. However, the Act precludes interstate and transnational electricity distribution.

NERC will continue to regulate electricity business

Until a state has passed its electricity market laws, NERC will continue to regulate electricity businesses in such states.

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