The Electricity Act Amendment Bill 2025 – The Need for a Cautious Rethink
Nigeria’s power sector, long plagued by blackouts and inefficiencies, has seen glimmers of hope since the landmark Electricity Act of 2023 decentralized authority, empowering states to take charge of their energy futures. Yet, just two years later, a proposed amendment bill threatens to unravel these gains, sparking fierce debate over federal overreach and the fragility of reforms. Sponsored by Senate Power Committee Chairman Enyinnaya Abaribe, the Electricity Act (Amendment) Bill 2025 has cleared its second reading but faces mounting calls for a pause—urging lawmakers to rethink its provisions before it stifles the very progress it claims to protect. As states push back against what they see as a rollback of autonomy, the bill highlights the delicate balance between national coordination and subnational innovation in Africa’s most populous nation.
The bill, introduced in early 2025 and debated intensely in July, seeks to amend the 2023 Act amid persistent challenges like vandalism, financing gaps, and regulatory overlaps. Key provisions include granting states the power to establish and manage their own electricity regulators and policies, but with stringent federal safeguards. The Nigerian Electricity Regulatory Commission (NERC) would retain exclusive control over the national grid, interstate operations, tariffs, consumer rights, and technical standards—effectively limiting state regulators (SERCs) to off-grid activities. For instance, SERCs would lose authority to license mini-grid operators, a move critics argue hampers local renewable energy projects. The legislation also mandates a 12-month deadline for states to comply with federal prerequisites for regulatory handover, with NERC stepping in as overseer for non-compliant regions, and introduces a Forum of Electricity Regulators to harmonize standards and resolve disputes. Additional reforms criminalize power infrastructure vandalism, redefine the Power Consumer Assistance Fund, and address transition issues for existing licenses.
These changes, while aimed at streamlining operations, have ignited controversy. The Forum of Commissioners for Power and Energy (FOCPEN), representing all 36 states, has rejected the bill outright, decrying the lack of consultation by the federal government and NERC. In a strongly worded statement, FOCPEN warned that the amendments “surprisingly seek to entrench a subsidy regime” and undermine state-led reforms that have already yielded results, such as Enugu State’s tariff reductions for high-consumption Band A customers. Analysts echo this sentiment, pointing to the bill’s potential to create regulatory duality and confusion.
To appreciate the stakes, consider the backdrop of the Electricity Act 2023. Assented to by then-President Muhammadu Buhari on March 17, 2023, as part of the Fifth Alteration to the 1999 Constitution, it shifted electricity from the Exclusive Legislative List to the Concurrent List— a historic move allowing states to generate, transmit, and distribute power independently. This decentralization spurred action: By mid-2025, 15 states had enacted their own electricity market laws, with nine receiving NERC’s nod for full regulatory oversight. States like Enugu and Lagos have launched mini-grids and tariff adjustments, fostering competition and attracting private investment in renewables. The 2023 Act was hailed as a game-changer for Nigeria’s chronic 4,000-megawatt supply shortfall against a 40,000-megawatt demand, but implementation hiccups—such as grid interconnectedness and funding—prompted calls for tweaks. The amendment bill emerges from these teething issues, yet proponents like Abaribe argue it’s essential to “strengthen regulatory oversight and inject fresh capital” into underperforming distribution companies (Discos), potentially leading to the sale of 11 loss-making Discos to new investors.
Experts, however, urge caution. Emeka Okpukpara, a policy analyst at The Nextier Group, warned that the bill’s “guided federalism” could spark constitutional rivalries: “It sets up overlapping mandates and conflicting standards, with NERC potentially dominating state initiatives. This isn’t empowerment—it’s a recipe for muddied waters and stalled progress.” In a pointed critique, a ThisDay editorial labeled the bill a “gamble,” questioning, “Why the hurry to fix what is not broken?” It highlighted how the amendments erode SERC independence, restore NERC’s monopoly on tariffs and anti-trust matters, and impose national safety overrides via the National Electricity Management Services Agency (NEMSA)—moves that could deter investors wary of policy flip-flops. FOCPEN’s opposition underscores broader state frustrations, with commissioners arguing the bill recentralizes control just as subnational markets were gaining traction.
The potential fallout is stark. By limiting states to non-grid activities, the bill risks stalling decentralized markets and eroding investor confidence, as contracts based on 2023 promises face ambiguity. It could exacerbate federal-state tussles, leading to legal battles over grid access and tariffs, while entrenching subsidies that strain federal budgets. On the flip side, clearer federal oversight might reduce vandalism—now criminalized—and streamline the National Wholesale Electricity Market (NWEM). Next steps hinge on the Senate’s Power Committee, where the bill now rests for public hearings and amendments. Stakeholders, including the Nigerian Governors’ Forum, are lobbying for revisions to preserve state autonomy, with some suggesting a complete withdrawal. If passed unchanged, implementation could begin within months, but delays for consultations seem likely amid the outcry.
Ultimately, the Electricity Act Amendment Bill 2025 embodies the tension between unity and devolution in Nigeria’s federation. While well-intentioned fixes are needed, rushing through centralizing clauses risks undoing the 2023 revolution. The takeaway for policymakers and citizens alike: A cautious rethink is imperative to safeguard decentralization, ensuring the power sector’s growth benefits all Nigerians without reigniting old battles over control.