Power, Insights

Power Sector Regulation in Nigeria: The Validity of the Lagos State Electricity Policy 2021 in the Context of Recent Legal Developments

Nigeria’s persistent inability to meet energy demand remains paradoxical, given the nation’s abundant endowment of natural and mineral resources scattered across its 6 geo-political zones. The Electric Power Sector Reform Act (EPSRA) of 2005, born out of significant deterioration of the power sector under government monopoly, was envisioned as a gateway to privatizing the power sector, holding the promise of a new era in the sector.

After years of privatization, Nigeria’s electricity supply industry (NESI) remained burdened by escalating debt, inadequate infrastructure, significant transmission and distribution losses, electricity theft, and extensive federal government control. Driven by these challenges and more, the Governments of States like Lagos, and Edo advocated for a devolution of regulatory oversight in the Power Sector. In 2021, the Lagos State Government unveiled its Electricity Policy (the “Policy”), aiming to establish its own electricity market exclusively managed by a State regulatory body.

This Policy was met with mixed reactions from stakeholders particularly on the legality of the State’s regulatory control over power generation, transmission, and distribution vis-a?-vis the position of the law at the time. This article seeks to assess the validity of establishing a State Electricity Market in light of the recent constitutional amendment on power sector regulation in Nigeria and the introduction of the Electricity Act 2023…

 

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