President Bola Tinubu has officially signed the Electricity Act (Amendment) Bill, 2024, making it law.
Ajuri Ngelale, the special adviser on media and publicity to Tinubu, announced in Abuja through a statement titled ‘President Tinubu’s endorsement of Electricity Act (Amendment) Bill’.
The bill, sponsored by Babajimi Benson of Lagos State’s Ikorodu Federal Constituency, was ratified by the House of Representatives on July 27, 2023, and the Senate on November 14, 2023.
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Below are the benefits of the amended 2023 Electricity Act
New Amendment
– The Electricity Act (Amendment) Bill, 2024, seeks to address the development and environmental concerns of host communities and sets aside five percent of the actual annual operating expenditures of power generating companies (GENCOs) from the preceding year for the development of their respective host communities.
– The amended bills stipulate that the funds earmarked for host community development shall be managed and disbursed for infrastructure advancements within the host communities by a reputable Trustee/Manager, chosen collaboratively by the relevant GENCO and their respective host community.
Other benefits
– 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.
– 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.
– Lawmakers under the bill are granted the power to carry out oversight responsibilities and function over the National Electricity supply industry through its respective Committees on Power in the Senate and House of Representatives.
This is to be executed notwithstanding the supervisory powers of any government ministry over government-owned enterprises or other entities operating in the Nigerian electricity supply industry in which the government has not divested its equity holdings, and irrespective of the ministry where such entities are placed for administrative supervision by the ministry.
– Under the Nigeria Electricity Bill, electricity generation licensees are mandated to meet renewable generation obligations as may be prescribed by NERC.
As such, 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. Fundamentally, the aim is to create a market for renewable energy and thereby stimulate investments in the sector.
– The Electricity Act also mandates the imposition of renewable purchase obligations on distribution or supply licencees.
– It also states that anyone may construct, own or operate an undertaking for generating electricity not exceeding 1 megawatt (MW) in aggregate at a site or an undertaking for distribution of electricity with a capacity not exceeding 100 kilowatts (Kw) in aggregate at a site, or such other capacity as the Commission may determine from time to time, without a licence.
