Senate passes bill to allow states generate, distribute grid electricity

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The Senate on Wednesday passed the Electricity Bill 2022 that would empower states to generate and distribute power.

The bill’s passage was sequel to the consideration of a report by the Senator Gabriel Suswam-led Senate Committee on Power.

Suswam in his presentation said the bill sought to among others, provide an Ideal legal and institutional framework to leverage on the modest gains of the privatisation phase of the electricity power sector in Nigeria.

He said that when signed into law, the bill would improve utilisation of generated power through increased investments in new technologies to enhance transmission and distribution of generated power to minimise aggregate value chain losses.

According to the lawmaker, the piece of legislation will reinvigorate the institutional framework for the reform of the Nigerian Electricity Supply Industry (NESI) initiated and implemented by the Federal Government.

“The bill, when signed into law, will open up the space in the power industry and allow states or individuals with capacities to generate their own power and distribute.

“Since electricity is on the Concurrent List in the constitution, the bill has allowed state governments to license people who intend to operate mini-grid within the state.

“The bill also gives legal backing to renewable energy. If you decide to generate one megawatt of power using solar as energy source, that is also provided for.

“That is the only way the power problem would be solved. The space is now opened. There is little restriction as to who will generate power and distribute.

“What is obtainable now is that any power generated must be put on the national grid for transmission and distribution.

“The bill also provides that any power generated below one megawatt does not require license to distribute,” Suswam said.

Suswam disclosed that the provisions of the bill sought to promote policies and regulatory measures that would ensure the expansion of power transmission networks in Nigeria in order to address any imbalance in the existing transmission infrastructure.

He noted that the bill would stimulate policy and regulatory measures to scale up efficient power generation, transmission and distribution capabilities of the sector; as well as address technological limitations and outdated infrastructure that were responsible for value chain losses.

The Senate President, Dr Ahmad Lawan, midway through consideration of the bill, sought to know the role and operational capacity of banks that had taken over Distribution Companies (DISCOs) indebted to them.

Responding, Suswam explained that the take-over of entities (DISCOs) by banks was duly carried out in collaboration with the Nigerian Electricity Regulatory Commission (NERC) and Bureau of Public Enterprise (BPE).

According to him, there is a transitional process put in place during the take-over of the Abuja Electricity Distribution Company (AEDC) by the United Bank for Africa (UBA) to ensure efficiency in service delivery.

He noted that such transitional process usually involved the invitation of new investors to scale up generation and distribution capacities.

Suswam further disclosed that the Federal Government had disbursed 100 million dollars to Siemens to kickstart transmission in the distribution end of the power sector.

On his part, Sen. Ahmad Babba-Kaita (PDP-Katsina), said the faulty way in which DISCOs were created was largely responsible for their inability to live up to expectations.

He, therefore, advised the Federal Government to ensure a transparent process in the selection of companies to take-over power generation and distribution across the country.

The Deputy Chief Whip, Sen. Aliyu Sabi Abdullahi noted that the aspect of renewable energy in the bill was given prominence amidst the energy mix.

The Electricity Bill, 2022, after a clause-by-clause consideration of the committee’s report by the Committee of the Whole, was passed by the upper chamber.

In his remarks, Lawan said that “because of its importance and sensitivity, we will like to see a quick concurrence by the House of Representatives.

“This is because time is of essence as far as Nigeria is concerned when you talk about electricity and energy supplies in Nigeria.

“So, we will like to see that this bill is fully processed in the National Assembly and sent to the Executive arm of government for consideration and assent by the President.

“We believe that this piece of legislation can change the fortunes of the electricity industry in Nigeria for the better.”

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