THE ELECTRICITY ACT AMENDMENT GAMBLEThe amendment bill is unnecessary
The moribund Nigeria power sector recorded a historic milestone on 17 March 2023 when the late President Muhammadu Buhari assented to the 5th Alteration Bills, 2023, thus devolving power from the Exclusive Legislative List to Concurrent Legislative List. Combined with the consequential Electricity Act enacted same year, that presidential assent fully decentralised electricity supply industry in Nigeria, making it possible for states to participate in its generation, transmission, and distribution. Since then, 15 states have passed laws to establish their state electricity markets, with Enugu State taking the lead. Nine states have been granted full regulatory oversight authority by the Nigerian Electricity Regulatory Commission (NERC).
However, this glimmer of hope in the power sector appears to be dimming already. With more states taking advantage of the Electricity Act 2023, and Enugu slashing electricity tariff for Band A in the state, some of these gains would seem to have shaken the table in some quarters, prompting the Electricity Act (Amendment) Bill, 2025, which has already passed a Second Reading in the Senate and awaiting a public hearing. Expectedly, stakeholders have rejected this move to arrest the progress made so far. Coming under the Forum of Commissioners of Power and Energy (FOCPEN) aegis, the 36 states have decried what they described as the lack of consultation by the federal government and the industry regulator, NERC, before plotting to derail the law.
Indeed, a critical review of the Electricity Act (Amendment) Bill 2025 would reveal clear attempts to erode or dilute the regulatory independence of the State Electricity Regulatory Commissions (SERCs) already established in the 36 states as well as undermine the vision of a fully decentralised, contract-based electricity market as envisaged under the Electricity Act 2023. For instance, Section 63 of the proposed Amendment Bill erodes the authority of SERCs by removing their explicit power to license mini-grid operators and allied institutions. Worse still, the Bill seeks to return NERC the exclusive authority over activities on the national grid system and interstate electricity operations.
Section 230C (1) (a) provides that states may regulate electricity fully within their borders only if the supply is not linked to the national grid. Section 230(c) (2) of the Amendment Bill equally restores to NERC the sole authority in critical areas like tariffs, consumer rights, technical codes, and anti-trust issues. Also, the safety role of the National Electricity Management Services Agency (NEMSA) will become national, and overrides state efforts as can be inferred from Section 230(c) (3) of the Amendment Bill. Meanwhile, licenses and contracts stay valid even during the transition of oversight from NERC to a SERC as seen in Section 230(c) (5) of the Amendment Bill.
Other concerns are the implied supremacy of NERC in dispute resolution, ambiguity and uncertainty in existing licenses and contracts in Section 230C (4–6), and the potential erosion of investor confidence arising from a rollback of state powers and the re-centralisation tendencies that would signal regulatory instability and policy reversals. This is especially so for investors that have already committed resources based on the decentralised framework of the Electricity Act 2023.
We agree with the concerns being expressed by the 36 states. The Amendment Bill has indeed arrogated more powers and control to the NERC by way of approval, making rules, setting out guidelines and participating in the distribution and trading of electricity space that is strictly for the SERCs. The Amendment Bill will recentralise control under NERC and stall the growth of truly subnational electricity markets. We note that the law is still very young and has done so well so far. Why the hurry to fix what is not broken?
We call on the National Assembly to let the Electricity Act, 2023 be.
