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🇳🇬 Nigeria /Energy & Infrastructure

Nigeria's Electricity Regulators Warn Amendment Bill Undermines Decentralization

From ThisDay · () English

Translated from English, summarized and contextualized by DistantNews.

At a glance

News Named sources Context piece
  • Nigerian electricity regulators warn the proposed Electricity Act 2023 Amendment Bill could reverse reforms and undermine the federal structure.
  • They argue the bill threatens constitutional and regulatory foundations that allowed states to build their own electricity markets.
  • The amendment comes despite the 2023 Act decentralizing power and 16 states beginning to establish their own electricity markets.

Nigeria's electricity regulators are sounding the alarm over the proposed Electricity Act 2023 Amendment Bill, warning it could dismantle hard-won reforms and dismantle the nation's federal structure. In a memorandum to the Senate Committee on Power, the regulators argued that the bill "threatens the constitutional and regulatory foundations" that have enabled states to develop their own electricity markets.

threatens the constitutional and regulatory foundations

— electricity regulatorsDescribing their concerns about the proposed Electricity Act 2023 Amendment Bill.

This proposed amendment comes at a critical juncture. In March 2023, President Muhammadu Buhari assented to the 5th Alteration Bills, devolving power from the federal government to states for electricity supply. The subsequent Electricity Act 2023 fully decentralized the industry, allowing states to participate in generation, transmission, and distribution. Since then, at least 16 states have enacted laws to establish their own electricity markets, with Enugu leading the way.

Despite decades of investment and privatization, Nigeria, with over 200 million people, still struggles to generate above 4,000MW, forcing many businesses to close or relocate. The 2023 Act was seen as a significant step towards restructuring and addressing this power poverty. However, the amendment bill, which has passed a second reading in the Senate, is now seen as a threat to this progress.

The Electricity Act 2023 therefore represents the much-touted restructuring in action and a very welcome development for the Nigerian power sector, especially for a country that is writhing in the pains of power poverty.

— ThisDayEditorializing on the significance of the 2023 Electricity Act before the amendment was proposed.

The regulators, representing commissions from numerous states, contend that the amendments signal a return to centralized control. They argue that the bill seeks to erode the independence and powers of State Electricity Regulatory Commissions (SERCs) and undermine the vision of a decentralized, contract-based electricity market. Specifically, Section 63 of the proposed bill reportedly removes the SERCs' explicit power to license mini-grid operators, a key component of the decentralized model.

a critical review of the Electricity Act (Amendment) Bill would reveal clear attempts to erode or dilute the regulatory independence and/or powers of the SERCs as well as undermine the vision of a fully decentralised, contract-based electricity market as envisaged under the Electricity Act 2023.

— regulatorsDetailing their specific concerns about the amendment bill's impact on regulatory bodies and market structure.
DistantNews Editorial

Originally published by ThisDay in English. Translated, summarized, and contextualized by our editorial team with added local perspective. Read our editorial standards.

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