The Lagos State House of Assembly recently passed the Lagos State Electric Power Sector Reform Law (the “Law”) and same has since been assented to by the Lagos State Governor. The Law essentially aims to boost electricity supply in Lagos State (the State) through the establishment of an embedded power scheme and the creation of offences for energy theft.
Key highlights of the Law include:
- the establishment of an embedded power scheme for the (i) scaling up of transmission and distribution infrastructure, (ii) provision of adequate feedstock for power generation and (iii) development of the cost effective tariffs to support embedded power generation (the “Embedded Power Scheme”);
- establishment of new entities such as the Lagos State Electricity Board (the “Board”), the Lagos State Embedded Power Council, and provision of additional powers to the Ministry of Energy and Mineral Resources (the “Ministry”) for the implementation of the Law;
- mandating the Lagos State to liaise with the Nigerian Electricity Regulatory Commission to establish special cost reflective tariffs for power projects under the Embedded Power Scheme;
- establishment of an embedded power stabilisation fund into which a levy of 2% of the tariff payable by consumers under the Embedded Power Scheme will be paid into, and the establishment if a power fund management company to oversee the management of the fund;
- introduction of various offences including offences for, (i) unlawful connection of electricity lines or cables, (ii) meter tampering, (iii) diversion of electricity, (iv) destruction of electric meters equipment, (v) lines, supplying of electric power without a license, (vi) dealing with unauthorized network/infrastructure, (vii) obstruction of officials of electricity companies who are carrying out their lawful duties, amongst others. A power task force is also established under the Law for the enforcement of the Law; and
- introduction of the requirement for (i) all entities intending to operate power plants with capacity greater than 1 megawatt in the State to obtain approval from the The Lagos State Electricity Board (the “Board”); and (ii) all power plants to be registered by the Board.
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