PwC roundtable commends Electricity Act 2023 and proposes key amendments
Lagos, 1 December 2023 – Leading professional services firm, PwC Nigeria, has hosted the 14th edition of its Annual Power and Utilities Roundtable, with the theme “The Electricity Act 2023: Powering Nigeria.” Industry leaders, executives, and stakeholders commended the Act and proposed key amendments to enhance the legislative framework.
Commenting on this year’s roundtable’s theme and its importance in shaping the future of Nigeria’s power sector, Pedro Omontuemhen, Partner and Energy, Utilities and Resources Leader, PwC Nigeria, noted that:
“The 2023 power roundtable’s timing coincides with the ongoing COP 28 in Dubai, highlighting the urgent need for continued action on climate change especially in the area of renewable energy. The Electricity Act can play a pivotal role in addressing this challenge by providing guidance on balancing the utilisation of our natural resources with the reduction of carbon emissions while showing how we can generate, transmit, and distribute adequate power to meet Nigeria’s energy needs.”
Noting further that “discussions at the roundtable have shown that power sector stakeholders welcome the Electricity Act as a good step especially for consolidating the laws governing the Nigerian electricity supply industry and establishing a policy framework that empowers state governments and investors. However, there is more to be done to enhance the legislation and make it more responsive to the realities of industry practitioners. In this regard, it is crucial for the Act to provide the policy framework necessary to implement practical solutions to address the metering gap.”
In his keynote address, Bimbola Banjo, Partner and Finance Advisory Leader, PwC Nigeria, applauded the transformative impact of the Electricity Act 2023, which has paved the way for state governments to actively participate in the generation, transmission, and distribution of electricity without causing significant overlap of the federal government’s overarching role in the sector.
He elaborated on the key provisions of the Act, including the separation of distribution from supply operations, incentivising renewable energy, the positioning of NERC as the apex regulator, the establishment of the Power Consumer Assistance Fund (PCAF), state government’s adoption of the Electricity Act, the establishment of N-HYPPADEC, and the definition of offences and penalties.
Banjo further noted that:
“While there is an urgency to adopt the Electricity Act, states must exercise caution and assess their readiness for implementation. The process of adoption will incur significant costs, including engaging legal and commercial advisors, and will require substantial investments in technology, human resources, and the establishment of state-level structures.
“Before proceeding, states should conduct a comprehensive evaluation of their electricity market and network infrastructure, accompanied by detailed technical and commercial feasibility studies. This rigorous assessment will ensure that states are adequately prepared to implement the Electricity Act effectively and reap its full benefits.”
The Electricity Act fosters collaboration among various stakeholders, including state governments and federal government ministries. These partnerships and an active state participation will lead to positive outcomes, such as the establishment of suitable investment vehicles, effective fundraising strategies, robust enforcement mechanisms, and enhanced knowledge exchange.
The roundtable’s panel of experienced power sector stakeholders discussed additional measures that will enhance the Electricity Act towards achieving its objectives.
Akinyemi Akingbade, Partner, Energy, Utilities and Resources, PwC Nigeria, who moderated the panel session, noted that:
There’s a need to consider the role the Electricity Act can play in stimulating local manufacturing of electricity assets, such as meters, and fostering domestic investments within Nigeria’s power value chain, which will help job creation and economic growth.
The panel session included: Engr. Razaq Obe, Honourable Commissioner for Energy and Mineral Resources, Government of Ondo State; Mrs. Folake Soetan - Chief Executive Officer, Ikeja Electric Plc; Ugochukwu Obi-Chukwu - Founder/CEO, Nairametrics; Dafe C. Akpeneye - Commissioner Legal, Licensing and Compliance, Nigerian Electricity Regulatory Commission; and Daniel Mueller, Chief Operating Officer, InfraCredit.
Engr. Razaq Obe noted that the Electricity Act has already started fostering collaborations in the sector. For example, there’s a forum of state commissioners for energy, which is a first in Nigeria’s history. He indicated the willingness of state governments to continue to collaborate to enhance the implementation of the Electricity Act.
Addressing the misconception surrounding reluctance to provide meters, Mrs. Folake Soetan emphasised that DisCos, despite facing cost challenges, believe in the benefits of metering for improved revenue collection. She stressed that DisCos are actively seeking collaborations with various stakeholders to increase meter deployment for their customers. The collaboration between DisCOs and state governments to deter energy theft will be key to achieving the Electricity Act's objectives.
Ugochukwu Obi-Chukwu expressed enthusiasm for the Electricity Act’s potential to promote renewable energy development in Nigeria, bringing about widespread adoption of solar energy in residential and community settings. Additionally, he emphasised the importance of digital transformation and data sharing to facilitate innovation.
Daniel Mueller emphasised the need for a clear and effective dispute resolution mechanism to address regulatory disputes and prevent inconsistencies in regulatory decisions. He highlighted the current potential for double regulation and abuse of power.
Dafe C. Akpeneye noted that enhancing The Electricity Act should include establishing a single, comprehensive law governing the entire power sector. While electricity distribution should remain within the purview of state governments, a centralised law is crucial to ensure consistency and prevent conflicts. The Electricity Act should clearly define the roles and responsibilities of regulators, establish industry standards, and outline how stakeholders should collaborate effectively.
