Mixed reactions trail suspension of electricity regulation by states
Energy experts have expressed diverse opinions on the Federal Government’s move to halt the issuance of regulatory oversight of the electricity sector to state governments, emphasising that the initial approval was poorly timed and unnecessary.
The experts in separate interviews with Sunday PUNCH expressed their belief that the decision was a recipe for chaos, even as they agreed that it was the right move to stop it.
While some argued that state governments lacked the expertise, resources, and infrastructure necessary for effective regulatory oversight of the electricity sector, other experts said the suspension would not resolve the issue but oppose creative thinking to get alternative solutions.
The Minister of Power, Adebayo Adelabu, announced the suspension of regulatory autonomy of the electricity market to state governments while speaking at the eighth edition of the Africa Energy Market Place Nigeria on Friday in Abuja.
According to him, an adequate understanding of the transfer of regulatory oversight of the electricity market to states is imperative for the survival and sustainability of the nation’s power sector.
In June 2023, President Bola Tinubu assented to the Electricity Bill, which authorised states, companies, and individuals to generate, transmit and distribute electricity.
The new electricity law repeals the Electric Power Sector Reform Act signed by President Olusegun Obasanjo in 2005.
The new Act, signed by Mr Tinubu, consolidates all legislations dealing with the electricity supply industry to provide an omnibus and ideal institutional framework to guide the post-privatization phase of the Nigerian Electricity Supply Industry and encourage private sector investments in the industry.
Reacting, an energy law specialist, Professor Dayo Ayoade, said, “On the face of it, the minister was correct to suspend the transfer of regulatory oversight on the electricity sector. The fact is very simple; our state governments do not have the talent, the capacity and certainly the machinery for proper regulatory oversight on electricity.
“The mistake is from the Federal Government. They jumped the gun and were too quick. I would love the minister and the government to tell us the kind of studies they did before they announced that they want to pass on everything straight to the state government. It was a recipe for chaos and I think it was right to stop it. Let them have a pilot study and look at the real-life impact on regulatory decision-making in different states.
“Five states are already in the pilot phase, so let us see those states and how they fare. Don’t forget that most countries are very different. you can compare Lagos to Osun or Benue State. You need those with deep markets where they can charge a proper tariff. Most of our states are too poor and it is wrong to immediately create a market where a vast majority of the population are poor and can’t pay any unreasonable tariff that would attract investors.”
On his part, the Rivers State chapter Chairman of the United Action for Democracy, Emafa Georgewill, stated that the suspension would not solve the immaturity of the states and underscored the necessity for decentralisation.
Georgewill, in an interview on Saturday, proposed establishing a regulatory framework to supervise the national electricity industry, while allowing states to create local regulations for generation, distribution, and regulation. However, he stressed that these regulations should align with national policies and laws to avoid conflicts.
