INSIGHTS TRANSMISSION UNDER THE ELECTRICITY ACT, 2023

Introduction

The Electricity Act 2023 (the “Act”) repealed the Electric Power Sector Reform Act (the “Repealed Act”). The Repealed Act unbundled the power sector, which led to  the formation of the Power Holding Company of Nigeria (“PHCN”) to temporarily hold the assets and liabilities of the National Electric Power Authority (“NEPA”). PHCN would later transfer the assets and liabilities to successor companies in the generation, transmission, distribution, trading, and bulk supply and resale of electricity chains of the power sector. Thus, the Repealed Act heralded the advent of privatization of the Power Sector, which to a certain degree has improved access to services. Whilst not downplaying the impact of the Repealed Act, one would agree that 18 (eighteen) years, the distance of time between the Repealed Act and the Act, down the line, the Repealed Act has outlived its effectiveness. This is more so given the fact that the Repealed Act was at variance with the constitutional concurrent powers of the federating States and did not envision advancement in technology. Therefore, to deepen the Nigerian Electricity Supply Industry (NESI), the Act was passed with several modernized features. This much is captured in the preliminary provisions of the Act:

“The primary objective of this Act is to provide a comprehensive legal and institutional framework to guide the operation of a privatised, contract and rule-based competitive electricity market in Nigeria and attract … private sector investments in the entire power value chain of the NESI."