On December 3, 2024, the Governor of Lagos State officially assented to the Lagos State Electricity Law, 2024 (LSEL). This landmark legislation empowers Lagos to independently manage the generation, transmission, and distribution of electricity within the State, significantly reducing reliance on the national grid and paving the way for energy sufficiency.
This Newsletter explores the key provisions of the LSEL, explores potential implementation challenges, and outlines the expected benefits for both citizens and businesses in Lagos State.
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Overview of the Lagos State Electricity Law, 2024 (LSEL)
In accordance with the provision of the Fifth Alteration Act No. 33 of 2023 to the Constitution of the Federal Republic of Nigeria, 1999 (as amended), which provides for the power of the States to legislate on the generation, transmission, and distribution of electricity within their territories, and in furtherance of the provisions of the Electricity Act, 2023, the Governor of Lagos State on 03.12.2024 assented to the Lagos State Electricity Bill. It became the Lagos State Electricity Law, 2024 (LSEL).
The LSEL sets up the Lagos Electricity Market (the Market) and introduces innovative measures that will ultimately cut the State’s heavy reliance on the national grid and result in energy sufficiency within the State.
Key Provisions of the LSEL
This newsletter delves into the key provisions of the LSEL, potential implementation challenges, and the expected impacts on citizens and businesses in Lagos State under five groupings of the provisions of the LSEL:
(i) Lagos State Market and Regulatory Oversight;
(ii) licensing requirements and tariff methodology;
(iii) enforcement of standards and customers’ and host communities’ interests;
(iv) off-grid electrification, emission control, and renewable energy; and
(v) general provisions.
Regulatory Framework and Consumer Protections—What it means for you
Our discussion in this Newsletter covers all the issues that prospective market players and consumers will find very useful;
- Establishment of the market and statutory bodies such as the Lagos State Electricity Regulatory Commission (the Commission) and the Lagos State Electrification Agency and their functions in regulating the market,
- The licensing regime for market participants, including the types and requirements for licenses, the transitioning of pre-existing licensees within the State, and the methodology for determining tariff to be paid by consumers in the State;
- Market standards for market participants and specific sanctions for non-compliance;
- Special provisions for the protection of consumers and a framework for receiving and resolving consumers’ complaints, and contributions to be made by generating companies for the development of their host communities and
- General provisions such as dispute resolution, the procedure for legal action against the Commission, and liability protection.
LSEL: Advancing Energy Sufficiency and Sustainable Growth in Lagos
The passage of the LSEL is a giant stride by the state towards energy sufficiency, economic success, and environmental sustainability. If the provisions of the LSEL are effectively operationalised, a viable electricity market will emerge in the State that will provide sufficient energy for consumers and profit for market participants.
With the framework formed in the LSEL, we expect the Commission to, immediately after its commencement, begin to make regulations and issue guidelines, rules, and directives that will set the provisions of the LSEL in motion and to issue the relevant notice to the Nigerian Electricity Regulatory Commission for regulatory authority to be transferred to the Commission.
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