Pursuant to the provisions of the Electricity Act 2023, Governor Babajide Sanwo-Olu signed the Lagos State Electricity Bill 2024 into Law on 3 December 2024.
The Lagos State Electricity Law 2024 ((LSEL)) repeals the Lagos Electric Power Sector Reform Law, 2018.
The Law establishes the Lagos State Electricity Regulatory Commission and provides extensively for a regulatory framework for the Lagos Electricity Market.
The major objectives of the Lagos State Electricity law according to its explanatory memorandum include: To provide for the creation and administration of the Lagos electricity market, establish a commercial and technical regulatory framework for the Lagos electricity market, ensure reliable and universal access to electricity for all residents of Lagos State, establish the Lagos State Electrification Agency and the Lagos State Electrification Fund for the delivery of reliable electricity supply to the unserved and underserved areas of the State.
In other words, the Law seeks to achieve the following:
- Reliable electricity
Ensuring that all residents of Lagos State have access to reliable and affordable electricity
- Energy market & Energy sources
Creating a robust and well-regulated energy market and diverse energy sources including a mix of energy sources.
- Investment
Fostering investment, competition, and innovation in the electricity sector
- Electrification
Electrifying underserved areas to contribute to the sustainable development of Lagos State
The law establishes a number of institutions to manage the State electricity market. These institutions include:
- Lagos State Electricity Regulatory Commission: An independent regulatory body that oversees compliance and licensing
- Lagos Independent System Operator (ISO): An entity that ensures system reliability and operational efficiency
Some of the regulatory activities provided for under the law includes:
- Licencing of operators under Lagos State Electricity Law
- Development of Lagos Integrated Electricity Policy and Strategic Implementation Plan
- Regulation and determination of tariffs.
- Enforcement of standards and customers’ and host communities’ interests
While the Law provides incentives for above average performance of its licensees, it also makes provision for penalties for non-compliance with its provisions.
An interesting provision of the law is its near exhaustive for conflict resolution.
The Law provided a very transparent procedure for the application and licensing of stakeholders and operators within its areas of operations and conditions precedent pursuant to which such licences may be withdrawn or forfeited.
Being the commercial capital of Nigeria and the economic hub of West Africa, it is expected that the creation of the Lagos Electricity Market would not just attract investment but also serve as a model for other states to emulate. Therefore, we have analysed the key provisions of the Law and also suggested necessary steps for the successful implementation of the Law.
In conclusion, hopefully, the innovations introduced by the law, will ultimately cut the State’s heavy reliance on the national grid and result in energy sufficiency within the State, in further confirmation of its status as the Commercial nerve center of Nigeria..
Powered by BroadStreet Associates @ www.broadstreetassociates.com.ng
