Senate Okays Electricity Bill to Boost Power Distribution

* Advocates increased investments, reform of NESI

Sunday Aborisade in Abuja

The Senate Wednesday, passed the Electricity Bill, 2022 after considering a report by its Committee on Power.

The Chairman of the Committee, Senator Gabriel Suswam, said the bill sought to provide an ideal legal and institutional framework to leverage on the modest gains of the privatisation phase of the electricity power sector in Nigeria.

He added that 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 loses. 

He said: “The bill, when signed into law, will open up the space in the power industry and allows 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 license 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.”

Suswan also said the bill would reinvigorate the institutional framework for the reform of the Nigerian Electricity Supply Industry (NESI) initiated and implemented by the federal government.

He said: “The provisions of the bill seeks 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generation, transmission and distribution capabilities of the sector; as well as address technological limitations and outdated infrastructure that are responsible for value chain loses. 

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 takeover of entities (Discos) by banks was duly carried out in collaboration with the Nigerian Electricity Regulatory Commission (NERC) and Bureau of Public Enterprise (BPE). 

According to him, there was a transitional process put in place during the takeover 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. 

He further disclosed that the federal government had disbursed $100 million to Siemens to kickstart transmission in the distribution end of the power sector.