Benefits of President Tinubu Signed Electricity Bill

Nigeria President Bola Tinubu has approved the new Electricity Act, which replaces the 2005 Electricity and Power Sector Reform Act.

The Electricity Act was first passed in July 2022 during the administration of the former President Muhammadu Buhari.

The new bill seeks to promote private sector investments in the Nigerian power sector and de-monopolise the nation’s electricity generation, transmission and distribution at the national level.

Below are some of the benefits of the new bill that was passed into law:

Electricity generating companies will be mandated to either generate power from renewable energy sources, purchase power generated from renewable energy or procure any instrument representing renewable energy generation.

For now, only three states -Lagos, Edo and Kaduna—have electricity market laws and can start regulating their markets. But for other states without such laws, NERC will regulate their electricity generation and transmission.

States can regulate their electricity markets by issuing licences to private investors who can operate mini-grids and power plants within the state. However, the Act precludes interstate and transnational electricity distribution.

Until a state has passed its electricity market laws, NERC will continue to regulate electricity businesses in such states.

The passage means that anyone may construct, own, or operate an undertaking for generating electricity not exceeding one megawatt in aggregate at a site, or an undertaking for distribution of electricity with a capacity not exceeding 100 kilowatts in aggregate at a site, or such other capacity as the Commission may determine from time to time, without a licence.

The Nigerian Electricity Regulatory Commission will be able to regulate the electricity sector within Nigeria.

Electricity generating companies will be mandated to either generate power from renewable energy sources, purchase power generated from renewable energy or procure any instrument representing renewable energy generation.

The commission can transition regulatory responsibilities from itself to state regulators when they are established.

Empowerment of states, companies, and individuals to generate, transmit and distribute electricity.

Electricity generation licensees are obligated to meet renewable generation obligations as may be prescribed by the Nigerian Electricity Regulatory Commission.