PricewaterhouseCoopers (PwC) Nigeria, said, the Electricity Act has the potential of minimizing economic losses estimated at $28bn annually.
It added that, the Electricity Act, will empowers states to establish state-owned utilities, ‘successor companies,’ capable of attracting long-term investment through innovative structures.
This was contained in a report highlighting the outcomes from the 14th edition of PwC’s Annual Power and Utilities Roundtable.
Focusing on the theme, ‘The Electricity Act 2023: Powering Nigeria’, the PwC noted, “Having vastly different electricity laws across states will be detrimental, creating market distortions and unfair competition.”
However, the Multinational Professional Services, (Pwc), alighted that having different electricity laws in different states, would also breed unhealthy rivalry among players in the industry and allows states to have independent electricity laws would be detrimental to the growth.
Recall that the new electricity act signed by President Bola Tinubu in June 2023, allows states to have their electricity laws and regulatory bodies that would separate them from the control of the Nigerian Electricity Regulatory Commission.
So far, Enugu, Ekiti, and Ondo have been permitted by NERC to set up independent regulatory bodies, having satisfied the requirements of the Act.
PwC argued the regulation of electricity must be consistent across the country. “There is a need to ensure that regulation of electricity across the federation is fairly consistent and avoid regulatory capture,” the financial consultancy noted.
“The evolution of the policy landscape in the power sector shows that significant progress has been made, but challenges remain. The Electricity Act of 2023 attempts to address some of these challenges and unlock new potential.”
It added that dedicated distribution and supply companies within states could act as special-purpose vehicles, drawing capital from state resources or private investors through primary or secondary markets.
PwC stated that with the Power Consumer Assistance Fund serving as a joint federal-state mechanism for targeted subsidies, the act facilitated collaborative fundraising efforts.
Emphasizing that: “Adopting the Electricity Act 2023 involves substantial financial investments. Engaging legal and commercial expertise, developing and establishing state-level regulatory bodies come at a significant cost, competing for limited state resources. Thorough due diligence and feasibility studies are crucial to ensuring efficient resource allocation and project viability.”
However, PwC argued the regulation of electricity must be consistent across the country. “There is a need to ensure that regulation of electricity across the federation is fairly consistent and avoid regulatory capture,” the financial consultancy noted.
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