Tinubu signs Electricity Act 2023 into Law

Barely ten days after his inauguration, President Bola Ahmed Tinubu has assented to the Electricity Act 2023.

The Electricity Act will change the Electricity and Power Sector Reform Act 2005.

It is predicted to offer a framework to information the post-privatization part of the Nigerian Electricity Supply Industry (NESI) and encourage personal sector investments.

Recall that the ninth National Assembly had initially handed in July 2022.

The improvement comes towards the backdrop of Nigeria’s difficult energy sector.

The Law ensures the de-monopolization of Nigeria’s electrical energy era, transmission, and distribution on the National stage and empowers states, firms and people to generate, transmit and distribute electrical energy.

Under the Act, states can concern licenses to non-public buyers who can function mini-grids and energy crops inside the state. However, the Act precludes interstate and transnational electrical energy distribution.

Under the Electricity Act 2023, the Nigerian Electricity Regulatory Commission (NERC) will be capable of regulate the electrical energy sector inside Nigeria with out prejudice to the states’ powers to make legal guidelines and create electrical energy markets inside these states and to manage these markets.

The Act mandates how NERC can transition regulatory obligations from itself to state regulators when they’re established. Until a state has handed its electrical energy market legal guidelines, NERC will proceed to manage electrical energy enterprise completely carried out in these states.

For now, Lagos, Edo, and Kaduna States have already got electrical energy market legal guidelines and may begin regulating their market. But for different states with out such legal guidelines, NERC will regulate. NERC will nonetheless perform cross-border rules – era and transmission throughout states will nonetheless be regulated by NERC.

The Act grants lawmakers the ability to hold out oversight obligations and performance over the NESI by way of its respective Committees on Power within the Senate and House of Representatives. It is to be carried out however the supervisory powers of any authorities Ministry over government-owned enterprises or different entities working within the Nigerian electrical energy provide trade.

Electricity era licensees are obligated to satisfy renewable era obligations as could also be prescribed by NERC. Under the Act, electrical energy producing firms can be mandated to both generate energy from renewable power sources, buy energy generated from renewable power or procure any instrument representing renewable power era.

The Electricity Act additionally mandates the imposition of renewable buy obligations on distribution or provide licensees.

The Act additionally states that anybody could assemble, personal or function an endeavor for producing electrical energy not exceeding 1 megawatt (MW) in combination at a website or an endeavor for distribution of electrical energy with a capability not exceeding 100 kilowatts (KW) in combination at a website, or such different capability as NERC could decide once in a while, with out a license.

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