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Electricity Bill 2021: Senate passes second reading on investment barriers in power sector



A new Senate bill meant to eliminate the current barriers hindering private sector investment in the power value chain passed second reading on the floor of the red chamber on Tuesday.



It was titled, ‘Electricity Bill 2021.’


The sponsor, Senator Gabriel Suswan, said that when passed, the proposed legislation will attract the funds needed to address the current funding gaps confronting the industry since the privatisation of the power sector.


He said that all the constraints had received various interventions by the executive and legislative arms of government over the years.



“The challenges have continued to threaten the viability of successor companies, including their financial capacity to invest in network improvement to guarantee reliable power supply as envisaged in their respective performance agreement,” Suswan noted.


The senator said that the Electricity Power Sector Reform Act 2005 was fraught with gaps and shortcomings that made it unsuitable to adequately regulate activities of market operators and participants in the post-privatised phase of the industry.



He also stressed the need to consolidate all legislations in the power sector into one electric statute in order to align regulatory responsibilities and ensure clarity of statutory roles for ease of compliance with regulatory requirements by operators.


“What is, however, required at this point is an ideal legal framework that will stimulate the deployment of relevant regulatory and policy measures.”


He said such law would accelerate growth in power generation capacity, improve utilization of generated power through investment in new technologies that would enhance transmission and distribution of generated power.


He said the bill when passed, would provide the framework for power diversification through the use of cleaner renewable energy sources such as coal, wind, sun and ensure sustainable energy mix.


The lawmaker added that the piece of legislation when re-enacted would also eliminate current barriers to private sector funds investment across the power value chain and attract the funds needed to address the current funding gaps confronting the industry since the privatization of the power sector


He said the available industry information indicates that countries that have gone through power sector reforms have realised the need for a comprehensive electricity laws that deal with post privatisation issues that were not contemplated by the reform legislation.


Suswan said the bill had taken care of all issues that require policy, regulation and statutory guidance in the Nigerian power sector


He said, “Part IV of the bill provides a clear guide on the unbundling of the Transmission Company of Nigeria into the Transmission Service Provider and Independent System Operator in accordance with its licence.


“Part VII. VIII. IX. X are concerned with critical issues to the electricity industry like electricity transmission, electricity distribution and electricity tariffs respectively


“Under parts V and XV of the Bill, the Nigerian Electricity Regulatory Commission and the Rural Electrification Agency retains their roles as regulator and coordinator of rural electrification respectively.


“Part XVII of the bill provides for the two establishment Act relating to the Nigerian Electricity Management Services Agency and the Hydroelectric Power Producing Areas Development Commission respectively.


He said the bill canvassed for the establishment of the Electricity Disputes Appeal Tribunal, which would compose of judicial and technical members to speedily resolve appeals arising from decisions of the Commission and other matters defined under the jurisdiction of the Tribunal. Appeals.


He said the bill would diversify the power sector to accommodate cleaner renewable energy sources, as well as boost investment from private sector participation.


He recalled that the Electric Power Sector Reform Act, 2005, provided the legal and institutional framework for the reform of the Nigerian Electricity Supply Industry initiated and implemented by the Federal Government between 2001 – 2013.


The Electricity Bill, 2021, after scaling second reading was referred by the Senate President, Ahmad Lawan,  to the Committee on Power for further work.








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