Some state governments, especially those that have passed electricity laws, have rejected the proposed Electricity Act (Amendment) Bill 2025, currently undergoing deliberation in the Nigerian Senate.
According to them, the unexpected legislative move was coming barely two years after the landmark Electricity Act 2023 was signed into law, and a period during which many States have only just begun to establish and operationalize their electricity markets under the new decentralized framework.
In a statement jointly signed by the Chairman of the Forum of Commissioners of Power and Energy in Nigeria (FOCPEN), Prince Eka Williams, and the Secretary, Omale Oga, the Forum called on the National Assembly to halt further consideration of the bill.
It lamented the absence of prior consultations during the drafting and presentation of the crucial amendment bill on the floor of the Senate, as more than 16 States have passed their electricity laws since the enactment of the Electricity Act in 2023 by President Bola Tinubu, with the Nigerian Electricity Regulatory Commission (NERC) transferring Regulatory Oversight to about 10 of them.
FOCPEN said the Electricity Act 2023, since its passage has catalyzed a wave of reform, empowering sub-national governments to drive electricity development within their territories, attract local and international investments, and address the unique power needs of their citizens.
Therefore, it said it was surprising that within two years of its passage, the Electricity Act 2023 was now subjected to a sweeping amendment of key provisions of the Act, without any consultation whatsoever with State governments or their regulatory institutions.
“This unilateral approach undermines the spirit of cooperative federalism and threatens to reverse the gains made in decentralizing Nigeria’s electricity sector,” it added.
FOCPEN noted that several provisions of the amendment bill egregiously violate foundational principles of true constitutional federalism, and threaten the successful implementation of a decentralized electricity market.
It specifically pointed out that “Amended Section 2 introduces a “non-conflict” clause that subordinates State laws to federal provisions, even within intra-state electricity markets. Amended Section 230 and new Sections 230A–C impose rigid timelines and conditions on States, effectively allowing NERC to retain overriding authority, even in areas where States have exclusive jurisdiction.”
The Forum said the amendment bill, if passed, will create a constitutional conflict between the Federal Government and States, as well as legal and regulatory conflicts between federal and state regulators, undermining the principle of cooperative federalism and potentially inviting judicial challenges.
It noted that the electricity amendment bill 2025 surprisingly seeks to entrench a subsidy regime in the power sector, even though electricity subsidies gulped N1.94 trillion in 2024 alone.
Noting that the total accrued electricity subsidies of more than N5 trillion remain unpaid, crippling the power sector and making it unviable for private sector investments.
It stated that the amendment bill, if passed, would further exacerbate the financial burden on the federal government and States, undermining efforts to achieve a sustainable and self-financing power sector.
FOCPEN also submitted that the amendment bill proposed the creation of numerous federal institutions, agencies and Funds, whose operational and administrative costs are to be directly passed on to electricity consumers, thus resulting in higher electricity tariffs for consumers.
It maintained that the imposition of additional financial burden on electricity customers already struggling with high electricity tariffs for Band A service is unacceptable, especially when States are actively pursuing cost-reflective tariffs tied to improved quality of service.
“In addition, the bill specifies mandatory contributions from consumers and market participants to fund the Power Consumer Assistance Fund (PCAF).
“Consumers, including those in States with cost-reflective tariffs, would bear the cost of subsidies through tariff surcharges, even in the face of widespread non-payment and market losses.
“By this provision, the amendment bill would also transfer over ₦5 trillion in unpaid subsidies to electricity consumers, worsening affordability and equity in electricity access,” it added.
The Forum said the amendment bill, if passed, would also create policy, legal and regulatory conflicts between Federal and State Agencies / regulators, significantly increasing regulatory uncertainty and risks for both federal and state-level investors in The Electricity Market.
“The bill will further exacerbate administrative bottlenecks in the power sector by: Undermining the autonomy of State electricity regulators. Creating overlapping jurisdictions and unclear regulatory boundaries. Imposing new levies and compliance burdens on market participants within state electricity markets, thus raising the cost of doing business in the power sector. Creating conflicting mandates and diluting accountability.
“Inevitably, the amendment bill will hinder public and private sector investments particularly in State electricity markets, and stall the momentum of recent reforms by President Bola Ahmed Tinubu in the power sector,” it added.
FOCPEN explained that the bill seeks to bestow upon NERC an overriding regulatory jurisdiction over electricity distribution, electricity distribution tariff design and implementation, and consumer protection within State electricity markets and centralize the regulation and enforcement of technical standards within states electricity markets under the NEMSA.
“These provisions contravene sections 13 and 14 of the second schedule of the 1999 Constitution (as amended) and undermine the constitutional powers of States’ Legislatures to make laws for electricity distribution within their territories.
“By virtue of the 5th alteration to the 1999 constitution (as amended) and the Electricity Act 2023, States have exclusive constitutional and regulatory jurisdiction over electricity distribution, whether connected, reliant or not connected to the national grid, within their territories,” it said.
The Forum reiterated that the total lack of engagement and consultation with States, who are now primary drivers of electricity sector development, in the drafting of this amendment bill is a serious concern. Noting that effective and sustainable reforms require collaborative efforts between federal and sub-national governments.
It also affirmed that the amendment bill threatens to dismantle the progress and positive reforms initiated by the Electricity Act 2023, which has been widely hailed as a pivotal step towards a more reliable and efficient power sector.
“This untimely amendment risks undermining President Bola Ahmed Tinubu’s key policy achievements in the energy sector,” the Forum submitted.
