Nigeria leads the world on fee collection innovation and broad ideas on how to extract more levies, fees, more from its citizens. Where we struggle is how to make them better, richer,  and boomer! Yes, “Lagos State government in conjunction with the Federal Road Safety Commission (FRSC) has begun to implement the proof of vehicle ownership initiative recently announced by the federal government…The certificate requires an annual fee of N1000.”

Yes, you need to pay yearly to prove that you own your car. Not really something new but the name is nonsensical. Just call it Annual Car Ownership Tax, but they will not do that since tax ordinance is handled differently, making it harder for the Ministry of Transportation, instead of the tax agency (FIRS), to keep the money.

They could have also called it Annual Vehicle Registration Fee but that is also another tax jurisdictional issue (remember the stamp duty tussle on who keeps the fund).

So at the end, it is named “proof of vehicle ownership” initiative, and that it is a service offered by the transportation ministry. Lagos kickstarts it, and it is coming to the local government area near you.

Nigerians Kick As Government Moves to Enforce Proof of Ownership Certificate Levy on Motorists

Energy Law :- Notable Provisions of The New Electricity Act 2023

In June 2023, the Electricity bill was passed into law, effectively repealing the Electric Power Sector Reform Act (EPSRA) 2005 and providing a new legal framework for the regulation of the Nigerian power sector especially in the areas of electricity generation, transmission, system operation, distribution, supply, trading, enforcement of consumer rights and obligations as well as providing a composite resource plan & policy that recognizes all sources for the generation, transmission and distribution of electricity including the integration of renewable energy to Nigeria’s energy value chain and the attraction of investments.

This article will be looking at this new law in detail, with a deeper focus on :-

– Its objectives.

– Its applicability scope.

– Its implementation and execution framework.

– The status of the minister of power.

– Licensing. 

What are the objectives of the Electricity Act 2023?

1. To provide an ideal legal & institutional framework to leverage on the modest gains of the privatization phase of the electric power sector in Nigeria to accelerate growth in power generation capacity and to improve utilization of generated power through increased investments in new and efficient power generation technology and revamping existing power plants.

2. To promote policy and regulatory measures to ensure the expansion of power transmission networks in Nigeria to address any imbalance in the existing transmission infrastructure.

3. To promote the development of a complete electricity market.

4. To provide a clear legal and institutional framework for the formulation and adoption of a national integrated  electric policy and implementation plan.

5. To promote policies and regulatory measures to increase geographic coverage in generation, transmission, distribution & related sub-sectors in the Nigerian electricity industry.

6. To recognize 3rd party investments in NESI(Nigerian Electricity Supply Industry) infrastructure by the private and public sectors.

What is the application & scope of the Electricity act 2023?

The jurisdiction of the Electricity Act applies throughout Nigeria and with respect to all aspects and segments of the power sector value chain in Nigeria. 

However, nothing in this act shall invalidate the following :-

– Any law passed by a state house of assembly regarding all aspects of generation, transmission, system operation, distribution, supply and retail of electricity within that state.

– Any law by a state house of assembly regarding the establishment, promotion and management of state electricity power stations.

– Any law passed by a state house of assembly to sanction the establishment of a state electricity market, the establishment of a state electricity regulatory authority or any entity by whatever appellation with powers to regulate such markets.

– Any collaboration between state or local governments and the Federal government for rural electrification, or between the states and local governments and distribution licensees to ensure electricity access to rural, unserved and underserved areas, promote investments in electricity or provision of electricity within states or local government areas.

– Any law passed by the state house of assembly to sanction the establishment of a state electricity market and state integrated electricity policy and strategic implementation plan.

Who is vested with the authority to ensure the implementation of the act and compliance with policies made pursuant to the act?

The minister of power is under this act responsible for the determination, formulation and monitoring of government policy for the Nigerian electricity supply industry and to perform the following functions :- 

– To advise the Federal government on all matters pertaining to the Nigerian electricity power sector.

– To issue general policy directions to the commission on matters concerning electricity, including direction on overall system planning and coordination, which the commission shall take into consideration in performing its functions under the relevant provisions of the Electricity act, provided that such directions are not in conflict with the act or the Constitution of the Federal Republic of Nigeria.

– To promote the development of local content in the NESI.

– To issue policy directives on cross border electricity trading in conjunction with the NERC(Nigerian Electricity Regulatory Commission) and other relevant ministries, departments and agencies to ensure energy security and energy self-sufficiency.

– In consultation with the ministry responsible for women affairs and other relevant ministries as the minister may determine, promote gender mainstreaming in the design and implementation of electricity projects and programs.

Are power generation, transmission and distribution still within the exclusive jurisdiction list of items/objects exercisable by the Federal Government under this act?

No, they aren’t any longer . States and even local governments can now engage in all aspects of power generation, transmission, system operation, distributionsupplyand retail of electricity within their states or local government areas.

What is the status of the Transmission Company of Nigeria (TCN) under the Electricity Act 2023?

The TCN PLC was the successor company licensed by NERC to handle transmission &market/system operation services under the repealed EPSRA 2005.

The NERC under the Electricity Act 2023 shall now create an entity called the ISO to take over from the functions of the TCN regarding System Operations (SO) as stipulated by the act and the terms and conditions of its license.

The TCN under the new act shall however retain its transmission service provider license.

What are the functions of the ISO?

1. Power generation, scheduling, commitment & dispatch.

2. Transmission scheduling and generation outage coordination.

3. Transmission congestion management.

4. International transmission coordination.

5. Procurement and scheduling of ancillary services and system planning for long term capacity.

6. Administration of the wholesale electricity market, including the activity of administration of settlement payments, in accordance with the market rules.

What is the status of the Nigerian Electricity Regulatory Commission (NERC) under the Electricity Act 2023?

The NERC under the new act is defined as a body corporate with perpetual succession which can sue and be sued in its corporate name and subject to this Act, perform all functions that body corporates may by law perform.

The NERC under the Electricity Act 2023 remains the spec regulator of the NESI and shall be an independent body in the performance of its functions and exercise of its powers under this act. 

The functions of NERC are :-

– To create, promote and preserve efficient electricity industry and market structures and to ensure the optimal utilization of resources for the provision of electricity services.

– To ensure adequate supply of electricity to consumers.

– To ensure the safety, security, reliability and quality of services in the production and delivery of electricity to consumers.

– To present quarterly reports to the president and National Assembly on its activities.

– To promote gender mainstreaming and local content requirements within the NESI.

– To maximize access to electricity services, by promoting and facilitating consumer connections to distribution systems in both rural and urban areas.

What does the act say on Business Licensing for services within the NESI?

The act states that without prejudice to the right of states to make laws and establish markets for the generation, transmission, system operations, distribution and supply of power within their territories/geographical jurisdictions, no person except in accordance with a license issued under the Electricity Act 2023 shall construct, own and/or operate any business in :-

– Power generation (minus captive generation)

– Distribution

– Supply

– Power trading

– System operations

HOWEVER, a person can do the following:-

– Construct, own or operate an undertaking for generating power not exceeding 1MW or a distribution capacity not exceeding 100KW on site in aggregate without a license.

– Construct, own, or/and operate an undertaking for generation, transmission, distribution, supply and sale of power, including building, owning and operating a mini-grid, an IEDN(Independent Electricity Distribution Network), or an IETN(Independent Electricity Transmission Network) within a state under a law enacted by a state house of assembly, provided that such a license does not permit its holder to provide interstate or transnational distribution of power in Nigeria.