A Bill to repeal the Electric Power Sector Reform Act 2005 and enact the Electricity Act 2011 passed second reading at the Senate plenary on Tuesday, 28th September and was referred to the Committee on Power for further legislative action. It was read for the first time on 8th October 2020. The bill which is sponsored by Senator Gabriel Suswam (PDP, Benue) seeks to consolidate all legislations in the Nigerian Electricity Supply Industry (NESI) and provide an omnibus Electricity Act, comprising the legal and institutional framework to guide the post-privatisation phase of Nigeria’s power sector.
Making a case for the passage of the bill, Senator Suswam in his lead debate, noted that several challenges are inherent in the power sector despite the gains recorded by the reform of the sector between 2001-2013 under the extant law. Some of the challenges he identified include operational constraints that emerged after the privatisation exercise, which included the absence of cost-reflective tariffs, inadequate enumeration and metering of consumers, limited access to investment funds, poor revenue generation and tariff deficits, among others. These issues, he stated cannot be adequately addressed by the provisions of the Electric Power Sector Reform Act 2005. He stated that several of these provisions are now redundant. They served their purpose during the reform exercise and are now inappropriate. According to him, another need for the re-enactment is to consolidate all legislations in the power sector into one law, in order to align regulatory responsibilities and ensure clarity of statutory roles for ease of compliance with regulatory requirements by operators.
If passed, the bill is expected to provide a framework for power diversification through the use of cleaner renewable energy sources, and to eliminate barriers to private sector investment across the power value chain and attract funding necessary to address the challenges confronting the sector.
The bill comprises 213 clauses divided into 21 parts numbered in roman numerals and five schedules.
- Part I states the objectives and application of the bill
- Part II provides for the National Integrated Electricity Policy and Strategic Implementation Plan
- Part III upholds the validity of the pre-privatisation and post-privatisation reform, and the powers of the Nigerian Electricity Regulatory Commission (NERC)
- Part IV provides for the unbundling of the Transmission Company of Nigeria (TCN) into a Transmission Service Provider and Independent System Operator in accordance with its licence.
- Part VI – Licensing
- Parts VII, VIII, IX, X – Electricity Generation, Electricity Transmission, Electricity Distribution and Electricity Tariffs, respectively.
- Parts V and XV – The Nigerian Electricity Regulatory Commission (NERC) and the Rural Electrification agency retain their roles as regulator and co-ordinator of rural electrification, respectively
- Part XVII and Second Schedule – Consolidate and codify the two establishments Acts for the Nigerian Electricity Management Services Agency (NEMSA) and the Hydroelectric Power Producing Areas Development Commission (HYPPADEC)
- Parts XII, XIII, XIV – Acquisition of land and Access to land by licensees, Consumer Protection and Licensee Performance Standards, Competition and Market Power, and the Power Consumer Assistance Fund, respectively
The bill contains novel provisions such as the establishment of the Electricity Disputes Appeal Tribunal under part XVIII, composed of judicial and technical members to resolve appeals from NERC’s decisions and other matters defined under the tribunal’s jurisdiction. Part XVI recognises renewable Energy and Energy Efficiency in the legal framework for the power sector. Part XIX creates offences peculiar to the electricity industry and prescribes punishments.
The bill seeks to stimulate investments along the power value chain from current licensees and non-licensees by providing statutory recognition for electricity distribution franchising, independent electricity distribution networks/ independent electricity distribution networks operators and independent electricity transmission networks/ independent electricity transmission networks operators, and others.