NewsSenate Passes Bill That Allows States, Individuals Generate, Distribute Electricity

Senate Passes Bill That Allows States, Individuals Generate, Distribute Electricity

July 22, (THEWILL) – This Bill seeks to consolidate on existing legislations in the Electricity industry and provide an ideal institutional framework to guide the post-privatisation phase of the Industry in Nigeria.

The Bill passed third reading, following the consideration of a report by the Senate’s committee on Power at Plenary on Wednesday.

Over the years, Nigeria’s Electricity industry has suffered operational and institutional lapses, which has rubbed off on many other sectors of the economy.

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The deplorable situation led to the Privatisation of the power sector in 2013, but this did not solve the problem of erratic power supply that has greatly impacted on economic growth and development.

At the Senate’s plenary, lawmakers considered the report of the committee on power to repeal and reenact a new legislation to provide an institutional framework for the post privatisation phase of the Power Industry.

The Chairman of the Committee, Senator Gabriel Suswam (PDP, Benue North East), in his presentation, said the bill seeks to, amongst others, provide an Ideal legal and institutional framework to leverage on the modest gains of the privatisation phase of the electric power sector in Nigeria.

He also said anyone or firm generating electricity below one megawatt, does not need licence to do so.

“The bill, when signed into law, will open up the space in the power industry and allow states or individuals with capacities to generate their own power and distribute. Since electricity is on the Concurrent List in the constitution, the bill has allowed state governments to licence people who intend to operate mini grid within the state.

“The bill also gives legal backing to renewable energy. If you decide to generate one megawatt of power using solar as energy source, that is also provided for.

“That is the only way the power problem would be solved. The space is now opened. There is little restriction as to who will generate power and distribute. What is obtainable now is that any power generated must be put on the national grid for transmission and distribution.

“The bill also provides that any power generated below one megawatt does not require licence to distribute”, he said, adding when signed into law, the bill would improve utilisation of generated power through increased investments in new technologies to enhance transmission and distribution of generated power to minimise aggregate value chain losses.

According to the lawmaker, the piece of legislation would, “reinvigorate the Institutional framework for the reform of the Nigerian Electricity Supply Industry (NESI) initiated and implemented by the Federal Government.”

He disclosed that the provisions of the bill seek to promote policies and regulatory measures that would ensure the expansion of power transmission networks in Nigeria, in order to address any imbalance in the existing transmission infrastructure.

Suswam noted that the bill would stimulate policy and regulatory measures to scale up efficient power generation, transmission and distribution capabilities of the sector; as well as address technological limitations and outdated infrastructure that are responsible for value chain losses.

The Senate President midway through consideration of the bill, sought to know the role and operational capacity of banks that had taken over distribution companies (discos) indebted to them.

Responding, Suswam explained that the take-over of entities (Discos) by banks was duly carried out in collaboration with the Nigerian Electricity Regulatory Commission (NERC) and the Bureau of Public Enterprise (BPE).

According to him, there was a transitional process put in place during the take-over of the Abuja Electricity Distribution Company (AEDC) by the United Bank for Africa (UBA) to ensure efficiency in service delivery.

He noted that such transitional process usually involves the invitation of new investors to scale up generation and distribution capacities.

Suswam further disclosed that the federal government had disbursed $100 million to Siemens to kick-start transmission in the distribution end of the power sector.

On his part, Senator Ahmad Babba-Kaita (PDP – Katsina North), said the faulty way in which Discos were created was largely responsible for their inability to live up to expectations.

He, therefore, advised the federal government to ensure a transparent process in the selection of companies to take-over power generation and distribution across the country.

Senate President Lawan, in his remarks after the passage of the bill, demanded quick response from the lower chamber in order to facilitate the assent by the President.

He said: “Because of its importance and sensitivity, we would like to see a quick concurrence by the House of Representatives, because time is of essence, as far as Nigeria is concerned when you talk about electricity and energy supplies in Nigeria.”

“So, we would like to see that this bill is fully processed in the National Assembly and sent to the Executive side of government for the consideration for assent by Mr President.

“We believe that this piece of legislation can change the fortunes of the electricity industry in Nigeria for the better.”

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