The Nigerian Electricity Regulatory Commission (NERC) has expressed its satisfaction with President Bola Tinubu’s prompt approval of the new Electricity Act 2023.
In a public notice, NERC emphasized the significance of granting legislative autonomy to the federating states regarding electricity generation, transmission, and distribution within their respective jurisdictions.
It described this development as a major milestone that will bring positive changes to the power sector and contribute to the growth of Nigeria’s economy.
Recall President Tinubu approved the electricity bill on June 10, granting states, companies, and individuals the authority to generate, transmit, and distribute electricity.
This new electricity law replaces the Electric Power Sector Reform Act (EPSRA) signed by President Olusegun Obasanjo in 2005.
The new Act consolidates all legislations related to the electricity supply industry, providing a comprehensive framework to guide the post-privatization phase and encourage private sector investments in the industry.
While this model is new to Nigeria, NERC acknowledged that it has been successfully implemented in other countries such as India, Australia, Canada, and the United States.
In these jurisdictions, clear separation between federal and state electricity regulation and markets has proven effective.
NERC recognizes the value of learning from the experiences and lessons of these countries to navigate potential challenges and maximize the benefits of the evolving power sector landscape.
To ensure a smooth and successful transition, NERC stressed the importance of collaboration among all stakeholders and the development of a harmonious working relationship.
The commission further announced that a stakeholders’ workshop will be held next month to address any concerns and challenges related to the act.
It states that establishing a clear framework and defining the scope of authority for each level of governance is a priority for the commission.
NERC aims to work closely with all stakeholders to create an environment that promotes efficient and effective sector governance, benefiting both investors and consumers. An orderly transition process is necessary to minimize disruption and provide stability and clarity to existing market participants and attract new investors, the commission stated.
Recognizing the importance of legacy reform issues and existing contractual commitments, NERC intends to collaborate with all state governments to ensure a smooth transition.
In pursuit of implementing the provisions of the electricity industry laws, the commission has scheduled a stakeholders’ workshop in July. The workshop will bring together market participants, state government representatives, and other interested parties to facilitate open dialogue, collaboration, and the development of a comprehensive roadmap for successful implementation of multitier electricity markets.
