A LEGAL APPRAISAL OF THE ELECTRIC POWER SECTOR REFORMS IN NIGERIA

ABSTRACT

Nigeria’s electric power sector requires substantial reform if the country’s economic development and poverty alleviation programme is to be realized. Currently, the country faces serious energy crisis due to declining electricity generation from domestic power plants which are basically dilapidated, obsolete, and in an appalling state of disrepair, reflecting the poor maintenance culture in the country and gross inefficiency of the public utility provider. The government encouraged the private sectors to invest into the electricity industry so that, the monopoly created by the NEPA could be demolished and at the same time, some independent power producers could enter into the electricity sector. This understanding is behind the introduction of the Power Sector Reform Act 2005 which was recently initiated by the Nigerian government with the goal of privatizing the National Electric Power monopoly, NEPA.  Age long principles of democratic governance, of sovereignty belonging to the people, the people’s entitlement to participate in their governance and most importantly from the point of view of the topic of this paper, that security and the welfare of the people are the principal aim of government, form the theme of the provisions of section 13 of the 1999 Constitution.  In Section 16 of the same Constitution, the second aim of government of ensuring the welfare of the citizens seems to be pointedly enjoined as the state is mandated therein to harness national resources and promote national prosperity and an efficient, dynamic and self-reliant economy which it shall control to secure maximum welfare, freedom and happiness of the citizens and without truncating the rights of individuals to participate in the major economic areas.   Building on the analysis of the introduction of the Reform Act, this long essay intends to present the central issues that led to d enactment of the Reform Act, the key objectives of the Reform Act. This includes the legal reforms, the Act, the essential sections, licenses and tariffs, tariff regulation, consumer’s protection, the impact of the reform, the shortcomings of the reform, the innovations and the consequence of the reform.  This steady decline in the Nigeria Electric Power Sector has led to a near complete failure of the system at the onset of the present civilian regime in 1999. The Reform program also led to the establishment of the Nigerian Electricity Regulatory Commission in 2005 which was made responsible for the regulation of tariffs. This long essay will therefore also examine the role of NERC as a sector regulators and its impact so far in establishing a licensing regime that will be attractive to potential investors.

As Nigeria implements its national utility privatization program, it is hoped that this legal review will benefit policy makers and emerging managers and providers of electric service in the country.

TABLE OF CONTENTS

ABSTRACT

TABLE OF CONTENTS

TABLE OF STATUTES

LIST OF ABBREVIATIONS

CHAPTER 1

GENERAL INTRODUCTION

1.0.0: INTRODUCTION

1.1.0: BACKGROUND TO THE STUDY

1.2.0: OBJECTIVES OF THE STUDY

1.3.0: FOCUS OF THE STUDY

1.4.0: SCOPE OF THE STUDY

1.5.0: METHODOLOGY OF THE STUDY.

1.6.0: LITERATURE REVIEW

1.7.0: DEFINITION OF TERMS

1.8.0: CONCLUSION

CHAPTER 2

EVOLUTION OF THE POWER SECTOR AND PRIVATIZATION

2.0.0: INTRODUCTION

2.1.0: DISCOVERY OF ELECTRICITY

2.2.0: HISTORY OF THE POWER SECTOR

2.3.0: PRIVATIZATION

2.3.1.0: HISTORICAL PERSPECTIVE TO PRIVATIZATION

2.3.2.0: ADVANTAGES AND DISADVANTAGES OF PRIVATIZATION

2.3.3.0: PROBLEMS AND CHALLENGES OF PRIVATIZATION

2.3.4.0: PRIVATIZATION CONSIDERATION

2.4.0: CONCLUSION

CHAPTER 3

POWER SECTOR REFORM IN NIGERIA

3.0.0: INTRODUCTION

3.1.0: IMPACT OF THE POWER SECTOR REFORM ON ELECTRICITY

3.2.0: PROPOSED REFORM

3.3.0: CHALLENGES AND OPPORTUNITIES

3.3.1.0: ECONOMIC AND SOCIAL

3.3.2.0: POLITICAL ISSUES

3.3.3.0: TECHNICAL CHALLENGES

3.3.4.0: ENVIRONMENTAL FACTORS

3.4.0:   OPPORTUNITIES

3.4.1.0: EFFICIENCY AND RELIABILITY OF SERVICE

3.4.2.0: INVESTMENT OPPORTUNITIES

3.4.3.0: EMPLOYMENT OPPORTUNITIES

3.4.4.0:TRANSFER OF TECHNICAL MANPOWER

3.4.5.0: ENCOURAGEMENT OF RESEARCH

3.5.0: RECOMMENDATIONS

3.6.0: CONCLUSION

CHAPTER 4

STATUTORY REGULATORY SCHEME FOR THE POWER SECTOR REFORM

4.0.0: INTRODUCTION

4.1.0: ELECTRIC POWER SECTOR REFORM ACT 2005

4.2.0: INNOVATIONS OF THE ACT

4.2.1.0: FORMATION OF INITIAL AND SUCCESSOR COMPANIES

4.2.2.0: DEVELOPMENT OF A COMPETITIVE ELECTRICITY  MARKET

4.2.3.0: ACQUISITION OF LAND AND ACCESS RIGHTS

4.2.3.1.0: CONDITIONS FOR LAND ACQUISITION

4.2.3.2.0: ACQUISITION OF ACCESS RIGHTS

4.2.3.3.0: PROTECTION OF LAND AND ACCESS RIGHTS

4.3.0: NATIONAL ELECTRIC REGULATORY COMMISSION

4.3.1.0: STRUCTURE OF THE NERC

4.3.2.0: GOALS AND OBJECTIVES OF THE NERC

4.3.3.0: LICENSING BY THE NERC

4.3.3.1: INTERIM LICENSES

4.3.3.2.: REGULAR LICENSES

4.3.3.3: CHALLENGES OF LICENSING

4.4.0: EXTENT OF THE ACT

4.5.0: CONCLUSION

CHAPTER 5

GENERAL CONCLUSION

5.0.0: CONCLUSION

5.1.0: RECOMMENDATION

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