The plot against the Electricity Act, 2023: Introducing The Electricity Act (Amendment Bill), 2025

Even before President Bola Ahmed Tinubu assented to the Electricity Act on 6 June 2023, the plot to strangle this cherished baby had begun. Barely two years after the Act gave statutory recognition to the most important restructuring of Nigeria’s electricity sector since privatisation, the Senate’s Electricity Act (Amendment) Bill, 2025, was finally unveiled in late 2025. It is presented in reassuring language: coordination, clarification, emerging issues, sectoral financing, consumer protection and transitional certainty. But in electricity, as in politics, the title of a thing is not always the truth of it.

The truth is simple. This bill seeks to claw back, by mere legislative drafting, what the Constitution deliberately gave to the states by constitutional amendment. It seeks to restore, in new vocabulary, the unitary electricity governance architecture that failed Nigeria for decades. It seeks to make the Nigerian Electricity Regulatory Commission, NERC, the master and commander of state electricity regulators, not the counterpart, collaborator and mentor that it ought to be. It seeks to preserve federal agencies in spaces where the Constitution no longer gives the National Assembly power to legislate. It seeks to make state electricity markets appear autonomous while ensuring that the key regulatory levers remain in Abuja.

This bill is therefore a bad idea. It is an assault on the logic of the 5th Alteration to the 1999 Constitution, 2023, and the Electricity Act, 2023; on the fragile investor confidence now gradually forming around state electricity markets; and on the only reform pathway that offers Nigeria a realistic chance of escaping the repeated failure of its electricity sector, especially the distribution side.

A little history

The Electricity Act, 2023, is not an accident. It is the statutory expression of a deliberate constitutional shift. In 2019, a group of governors questioned, at the National Economic Council under then Vice President Yemi Osinbajo, the abject performance of electricity Discos after the 2013 privatisation. A committee of six governors constituted to examine the matter concluded that unless states took responsibility for their energy security, federalism, devolution and economic progress would remain dead letters. The first step was a constitutional amendment to remove the constraints on the powers of states to make laws for electricity within their territories.

This led to the move to amend Paragraph 14 of the Concurrent Legislative List, Part II, Second Schedule to the 1999 Constitution, ratified by the States and assented to by President Buhari as part of the 5th Alteration to the 1999 Constitution in March 2023. It removed the old limitation that confined state legislative competence to electricity areas “not covered by a national grid system”. That phrase mattered. It was added in the 1999 Constitution to a similar Paragraph 14 inherited from the 1979 Constitution. This vague phrase was then used to justify the fiction that once electricity touched the national grid, its regulation belonged to NERC alone. The result was a centralised electricity sector in a federal country that reduced states to spectators in a matter vital to their individual economic wellbeing.

The 5th Alteration ended that constitutional aberration. The Electricity Act, the first legislation assented to by President Tinubu, then gave it statutory effect. It is important to recall that the Act was not originally conceived to be reformist. It was intended to consolidate existing electricity-sector statutes and federal agencies and reinforce the powers of the minister and the various federal regulators; it aimed to re-establish, much like the intent of the Petroleum Industry Act.

Its reform essence — Sections 2(2) and 230(2)–(9) — was inserted through the efforts of the Nigerian Governors’ Forum, led then by Governor Kayode Fayemi, working with governors from across the six geopolitical zones. The House of Representatives, under Speaker Femi Gbajabiamila, ensured these reform provisions went into the Senate version. The harmonised bill became the Electricity Act, 2023. This history matters because state electricity markets are not an afterthought, a personal agenda, or an accidental drafting outcome. They were the deliberate product of constitutional amendment, states’ ratification, legislative negotiation and presidential assent – precisely how laws are made. The purveyors of this amendment bill appear to have forgotten, or chosen to ignore, this history.

Thus, the substance is clear. States can now legislate exclusively and fully for electricity within their territories. They can establish electricity markets and state regulators. They can design policy and legal frameworks for whatever electricity activity is carried on within their boundaries.

This bill is a constitutional law non-starter.

State markets do not mean Nigeria no longer has a national grid, a national system operator, interstate trade, cross-border transactions or federal responsibilities. It means only that Nigeria’s electricity reform can no longer be delivered from a single regulatory command centre. It also means, and we must be clear-eyed about this, that the Amendment Bill has a serious constitutional law problem from the onset. Paragraph 13 of Part II of the Second Schedule gives the National Assembly power over generation and transmission in relation to the national grid and over interstate and international electricity matters. It is careful about what it says. It does not refer to “electricity distribution” or confer on the National Assembly even a vague or general power over electricity distribution within states. It simply does not mention it. This has consequences. Paragraph 14, on the other hand, in the clearest terms confers on states the power to make laws for electricity within their territories. As simple as that, the boundaries are crystal clear.

It is elementary that the National Assembly cannot, by ordinary legislation, reinsert limitations that the Constitution has removed. It cannot, by calling a thing coordination, recover powers it no longer has. It cannot, by expanding NERC or NEMSA’s role, amend the Constitution through the back door. The National Assembly does not have the constitutional power to enact this Electricity Act (Amendment) Bill to the extent that it touches on electricity distribution or anything connected therewith and the conduct of generation, transmission and ancillary business solely within the boundaries of a state. Yet that is what the Amendment Bill attempts.

So, put simply, most, if not all, of this amendment bill is liable to be declared unconstitutional by a court of law. This is where the discussion should end, but, out of caution, we should also discuss the substance of the bill’s proposed amendments.

Seven hills to climb

First, the proposed amendment to Section 2. On its face, it appears to restate the constitutional powers conferred on states. It says State Houses of Assembly may make laws on generation, transmission, system operation, distribution, supply and retail electricity within state boundaries. So far, so good. But then comes the proviso. State laws must not conflict with federal provisions relating to the national grid, the National Wholesale Electricity Market, technical standards, operational codes, consumer protection, antitrust, and climate change mitigation and adaptation. That provision negates the express provisions of Paragraphs 13 and 14 of the Concurrent Legislative List. By what power can the Senate insert it without another constitutional amendment? None.

National standards are important. No serious state electricity market should operate unsafe networks, undermine grid discipline or create regulatory chaos. The problem is that this proviso is not drafted as cooperation. It is drafted as a federal override. It takes matters that may arise wholly within a state market — consumer protection, technical standards, operational codes and competition rules within state markets — and places them under a federal supremacy formula. That is not federalism. It is unsubstantiated arrogance and a superiority complex disguised as conditional delegation. The States did not receive their electricity lawmaking powers from NERC, NEMSA or the minister of power. They received them from the Constitution. Federal legislation cannot downgrade unconditional constitutional authority into delegated statutory authority.

Second, regulatory confusion. Section 63(7) of the Electricity Act currently preserves the integrity of state licensing and market operations in respect of mini-grids. The bill proposes to delete it. It looks like clearing up ambiguity but is actually the direct opposite. In a sector where investors need to know who licenses, who regulates, who approves tariffs, who enforces performance standards, who resolves disputes and who bears political responsibility, ambiguity is poisonous. State markets are already difficult enough to build. Apart from law, institutions, people, data, tariffs and contracts, they require certainty. To delete a provision that affirms state licensing authority is to invite uncertainty precisely when certainty is most needed.

Third, the proposed transition regime. This is the heart of the Bill. Proposed Sections 230A to 230C introduce a 12-month period within which States must meet transition conditions, with a possible six-month extension at NERC’s discretion. If a state fails to satisfy NERC, NERC may determine interim arrangements. NERC is also positioned to review state progress, adjust implementation frameworks and determine regulatory boundaries.

This is not a transition. It is an imposition. What makes these provisions even more curious is that what is to be transitioned to state regulators by NERC is essentially intellectual property, all of which is in NERC’s absolute control. Obviously, it is NERC that has the obligation to respond to a state seeking transfer of authority with a programme for the transfer of that IP. Instead, the amendment makes an unclear reference to “conditions precedent stipulated under the Principal Act” and imposes a compulsory period of 12 months during which the State must fulfil these “conditions precedent”.

The Electricity Act already created a transition process, which the new sections do not delete or replace. That means the Act would, when amended, provide for two diametrically opposed transition processes. Under Section 230(2)–(4), a state that has enacted its electricity law and established its regulator with a governing body and staff may engage NERC and the NCP and request the transfer of regulatory oversight and the establishment of an electricity distribution subsidiary in the state. Following this engagement, NERC issues a transfer order any time within six months following notification by the state. This is sensible because states are not all at the same point. Some have moved quickly. Some will move slowly. Some have policy capacity but no regulator. Some have laws but no staff. Some have strong political will but weak technical support. Some will initially rely on embedded expertise from NERC, licensees, consultants or development partners. This is how institutional reform works.

The proposed 12-month-plus-six-month timeline solves a problem that does not exist and creates another that no state needs. The real challenge is not that states are refusing to transition. It is that they must build capacity responsibly. They need market rules, licensing frameworks, tariff methodologies, inspection arrangements, consumer redress processes and grid-interface rules. They must decide how to deal with legacy DisCos, embedded generation, industrial clusters, rural electrification, franchising, mini-grids, state assets, federal assets and commercial off-take. These are not ceremonial tasks, and they cannot be executed by imposed timelines.

Look out for the concluding part, published exclusively in BusinessDay.

Eyo O. Ekpo is the CEO, Excredite Consulting Limited and a past commissioner, Nigerian Electricity Regulatory Commission.