The Electricity Act Amendment Bill, 2024, is a proposed legislation that aims to reform the Nigerian electricity sector and address the challenges of power generation, transmission, distribution, and consumption.
The bill, which was sponsored by Hon. Babajide Benson of Ikorodu constituency of Lagos State, was passed by both the House of Representatives and the Senate in 2023, and signed into law by President Bola Tinubu on February 9, 2024.
The bill introduces several changes and innovations to the Electricity Regulation Act, 2006, which was the previous legal framework for the electricity sector. Here are some frequently asked questions and answers about the Electricity Act Amendment Bill.
What are the main objectives of the Electricity Act Amendment Bill?
The Electricity Act Amendment Bill has the following objectives:
- To promote the development and environmental protection of host communities of power generating companies (GENCOs) by setting aside 5% of their annual operating expenditures for infrastructure projects in the host communities.
- To establish the Transmission System Operator SOC Ltd, a new entity that will be responsible for the operation, maintenance, and expansion of the national grid, as well as the coordination and dispatch of electricity from various sources.
- To create an open market platform that will allow for competitive electricity trading among GENCOs, distribution companies (DISCOs), eligible customers, and other market participants.
- To assign the duties, powers, and functions of the Transmission System Operator SOC Ltd to the National Transmission Company South Africa SOC Ltd, a joint venture between the Nigerian and South African governments, which will own and manage the transmission assets and infrastructure.
- To enhance the regulatory and enforcement powers of the National Energy Regulator (NER), which will oversee and monitor the electricity sector and ensure compliance with the provisions of the Act.
What are the expected benefits of the Electricity Act Amendment Bill?
The Electricity Act Amendment Bill is expected to have the following benefits for the Nigerian electricity sector and the economy at large:
- It will improve the quality and reliability of electricity supply, as it will reduce the losses and inefficiencies in the transmission and distribution networks, and increase the availability and diversity of power sources.
- It will foster the development and welfare of host communities, as it will provide them with funds and opportunities for infrastructure projects, such as roads, schools, health centers, and water supply.
- It will stimulate the growth and competitiveness of the electricity market, as it will encourage more investment and innovation in the power sector, and create more choices and options for consumers and producers of electricity.
- It will enhance the transparency and accountability of the electricity sector, as it will ensure that the NER and other stakeholders adhere to the principles and standards of good governance, and that the electricity tariffs and prices reflect the true costs and benefits of electricity.
What are the potential challenges or risks of the Electricity Act Amendment Bill?
The Electricity Act Amendment Bill also poses some challenges or risks for the Nigerian electricity sector and the economy at large, such as:
- It may face legal and political opposition from some stakeholders, such as the existing GENCOs and DISCOs, who may perceive the bill as a threat to their interests and profits, and may challenge its constitutionality and validity in court.
- It may encounter technical and operational difficulties, such as the lack of adequate infrastructure and capacity, the need for coordination and cooperation among various entities and agencies, and the possibility of cyberattacks and sabotage on the transmission system and the open market platform.
- It may require significant financial and human resources, such as the funding and expertise needed to implement and sustain the reforms and innovations introduced by the bill, and the compensation and training needed for the affected workers and communities.
