The wave of instant accolades that has so far trailed the new Electricity Act, 2023 recently signed by President Bola Tinubu, consolidating all existing legislations that are predicated on the steady electricity supply is not unexpected. Indeed, it underscores the significance of breaking the persisting paradox of preventable pains, experienced by long-suffering Nigerians, who have been groaning in darkness despite living in the midst of abundant natural electric power resources such as the sun, wind, water, coal and all manner of household wastes.

Praiseworthy is the fact that the electricity bill authorises states, companies and individuals to generate, transmit and distribute electricity. It has therefore repealed the Electric Power Sector Reform Act (EPSRA) which was signed by President Olusegun Obasanjo in 2005. Back then, it provided the legal, regulatory and governance frameworks underpinning the Nigerian Electricity Supply Industry (NESI).

What is of significance is the need for Nigerians to truly understand what it brings to the electric power table, the role they could play as well as the implementation thereof. It is however, important to understand where we are coming from, the challenges that have so far bedevilled the power sector, before we can get it right.

For instance, privatisation took place in 2013 with the key players in the on-grid Nigerian Electricity Supply Industry (NESI) including generation, transmission, distribution, and regulation. While the Generation Companies (GenCos) across the country were responsible for producing electricity, the Transmission Company of Nigeria (TCN) handled wheeling the electricity to the Distribution Companies (DisCos) and international customers.

Most of the 24 GenCos had an agreement, called the Power Purchase Agreement (PPA), with the Nigerian Bulk Electricity Trading Plc. (NBET). This agreement allowed the NBET to off-take the electricity and sell it to the DisCos. Some of the power generation plants in Nigeria include Egbin, Trans- corp, Azura, Shiroro, Olorunsogo, Sapele, Ge- regu, Kainji, and Jebba. But the challenges experienced by GenCos include insufficient access to foreign exchange (Forex) to procure spare parts, gas shortages, stranded electricity generation and huge electricity debts by NBET.

According to media reports on July 31, 2022 it was reported that the 11 Distribution Companies (DisCos) in Nigeria lost the capacity to pay N484.993 billion of the N1.084 trillion it owed for the supply of electricity within 16 months. Experts on the power sector traced this to the fact that when the PHCN was unbundled, the DisCos that came into the system were not prepared; leading of course to the querulous issue of exorbitant estimated billings.

Also, on January 10, 2023 it became public knowledge that remittances to NBET by DisCos dipped by 14.26 per cent as the electricity supply industry was losing as much as N4.79 out of every N10 worth of energy sold. That was according to the data sourced from the latest Nigerian Electricity Regulatory Commission (NERC).

This sad development was due to a combination of inefficient distribution networks, energy theft, low revenue collection and unwillingness of customers to pay their bills. But the new Act signed by President Tinubu comes with advantag- es such that anyone may con- struct, own, or operate an undertaking for generating electricity not exceeding one megawatt in aggregate at a site.

Electricity generation licensees are, how- ever, obligated to meet renewable generation obligations as may be prescribed by the NERC. The generating companies will, however, be mandated to either generate power from renewable energy sources, purchase power generated from renewable energy or procure any instrument representing renewable energy generation.

This is a great move as it is not only environmentally friendly but will generate sustainable employment. Let it be noted that the states can regulate their electricity markets by issuing licences to private investors, especially those who can operate mini-grids and power plants within the state. However, the Act precludes interstate and transnational electricity distribution.

The NERC will be able to regulate the electricity sector within Nigeria and can transition regulatory responsibilities from itself to state regulators when they are established. Until a state has passed its electricity market laws, NERC will continue to regulate electricity businesses in such states. But for now, only three states “ Lagos, Edo and Kaduna “ have electricity market laws and can start regulating their markets.

Going forward, since the law- makers are granted the power to carry out oversight responsibilities and function over the NESI, through its respective Committees on Power in the Senate and House of Representatives this should be done, with account- ability and devoid of political acrimony. With the states empowered to fix prices, the 33 states without market laws should speed up the process.

And the issue of affordability should be taken note of, so as not to overburden the citizens already going through a lot of challenges including inflation currently escalated by the fuel subsidy removal. Electricity generation, transmission and distribution do not amount to rocket science. The infrastructure should therefore be well organised and made stable. Once this is done Nigerians stand to benefit maximally as it will serve as the long-missing catalyst for the rejuvenation of our industrialization.