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President Tinubu Signs the Electricity Act of 2023, Giving States and Secret Businesses Power to Generate Power

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President Tinubu has signed the 2023 Electricity Act into law, replacing the 2005 Electricity and Power Sector Reform Act. The new law will allow states, companies, and individuals to generate, transmit, and distribute electricity in Nigeria.

The Act precludes interstate and transnational electricity distribution. The Nigerian Energy Regulatory Commission (NERC) will govern the energy industry within Nigeria, while states can pass laws, create electricity markets, and regulate those markets.

NERC can delegate regulatory authority to state regulators once they are constituted. Lagos, Edo, and Kaduna states already have power market regulations in place, while NERC will regulate in states where such regulations do not exist. NERC will continue to regulate generation and transmission across states.

Lagos, Edo, and Kaduna states may start regulating their markets for the time being because they already have power business regulations in place. However, in states where there are no such regulations, NERC may make regulations. Cross-border regulations governing generation and transmission between says will continue to be implemented by NREC.

The Act even empowers legislators to carry out supervision duties and exercising control over the NESI through the Senate and House Committees on Power. This is should be done regardless of any government Ministry’s regulatory authority over state – owned companies or other institutions engaged in the African power supply industry.

NERC requires licensees for power generation in order to fulfill renewable generation requirements. According to the Act, electricity-generating companies must either produce electricity from renewable energy sources, buy energy produced by solar sources of energy, or buy any equipment that represents the generation of electricity.

The Electricity Act also mandates the imposition of green buy obligations on submission or supply owners

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