Decentralisation and Democratizaion of the Nigeria Electricity Distribution Business Under the 1999 Constitution

Chuks Nwani

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The privatisation of electric power sector was greeted with a thunderous ovation by most Nigerian citizens with hopes raised to high heavens and the attendant public expectations of an end to epileptic power supply in Nigeria. Nigerians openly expressed support for the reform and more specially to end the endemic corruption and unsustainable subsidy that has been the bane of Sector.

Seven years down the line, the peoples’ confidence in the exercise has waned considerably and the support hitherto extended to the reform, nose-dived beyond redemption. It has been protests and complaints all the way, ranging from criminally expensive bills, lack of power supply, irresponsible and poor customer service, etc which has led the citizen to pray silently for a reversal to the old order of NEPA on the principle that “if we cannot get power at least we will get discounted bills.

Painfully, Nigerians have continued to swallow the endless daily “bitter pills” and its attendant accumulated monthly bills for darkness provided. The electricity distribution companies who are the closest to the consumers have to endure the deserved and undeserved attacks and blames for the systemic failure. Yes, it is a failure of Nigerian system, another round of betrayal of trust of the Nigerian people whose hopes and aspirations were collectively raised and dashed by the system. It is an example of Nigerian project with fantastic beginning and yet a sad ending.  How did we get here and where did we get it wrong?

Time and time again, the Federal Government of Nigeria and the Nigeria Electricity Regulatory Commission have truly demonstrated that they were merely usurpers in the regulation of electricity distribution business and hence are unable to articulate and pursue policies that can truly provide affordable and reliable electricity to the people.

The state governments who are truly vested with the powers to make and implement policies regarding electricity distribution in their various states have looked the other way while the federal government continued with its experimental and inconsistent policies that has driven the desired service farther away from the average electricity consumers.

It is not correct as has been consistently asserted by practitioners that the various state government do not have role to play in the electricity regulatory process under the 1999 Constitution (As Amended). The various state House of Assembly are vested with the powers under the constitution to make laws for the regulation of electricity business in their states.

Section 4 (7) (b) of the Constitution of Federal Republic of Nigeria 1999 (As Amended) provides that the House of Assembly of a State shall have the power to make laws for the peace, order and good government of the State or any part thereof with respect to the following matters, that is to say – any matter included in the Concurrent Legislation List set out in the first column  of Part 11 of the Second Schedule to this Constitution to the extent prescribed in the second column opposite thereto.

Section 13 of part 11 of the Second Schedule to the 1999 Constitution (As Amended) provides as follows:

The National Assembly may make for the Federation or any part thereof with respect to:

  • Electricity and establishment of electric power stations;
  • The generation and transmission of electricity in or to any part of the Federation and from one state to another state;
  • The regulation of the right of any person or authority to dam up or otherwise interfere with the flow of water from sources in any part of the Federation;
  • The participation of the Federation in any arrangement with another country for the generation, transmission and distribution of electricity for any area partly within and partly outside the Federation;
  • The regulation of the right of any person or authority to use, work or operate any plant, apparatus, equipment or work designed for the supply or use of electrical energy.

Section 14 of part 11 of the Second Schedule to the 1999 Constitution (As Amended) provides as follows;

A House of Assembly may make laws for the State with respect to:

  • Electricity and the establishment in that State of electric power stations;
  • The generation, transmission and distribution of electricity to areas not covered by a national grid system within that state; and
  • The establishment within that state of any authority for the promotion and management of electric power stations established by the State.

Section 15 of part 11 of the Second Schedule to the 1999 Constitution (As Amended) defined distribution and transmission as follow;

“distribution” means the supply of electricity from a sub-station to the ultimate consumer.

‘transmission’ means the supply of electricity from a power station to a sub-station or from one substation to another substation and the reference to a “sub-station’ herein is a reference to an assembly of plant, machinery or equipment for distribution of electricity.

CPCS International Transcom in association of Legal Advisory Partnership (LAP) in the report submitted to BPE has maintained that the National Assembly derives its power from the Constitution to enact Electric Power Sector Reform Act to regulate electricity distribution business in Nigeria. According to their report:

“The Constitution of the Federal Republic of Nigeria empowers the National Assembly and State Assembly to make laws for the Power Sector. The EPSR Act is a Federal law enacted pursuant to the Federal legislative powers of the National Assembly contained in the Second Schedule Part II Concurrent List of the Constitution of the Federal Republic of Nigeria 1999 (“the Constitution”). The inclusion of electricity in the concurrent list means that the National Assembly (Federal) and State Houses of Assembly have legislative powers in this subject to the extent set out in the Second Schedule. The Second Schedule Part II to the Constitution provides that the Federal legislative assembly may make laws in respect of electricity for the Federation or any part for amongst other matters “the generation and transmission of electricity in or to any part of the Federation and from one State to another State”. The distribution of electricity is not explicitly mentioned in the concurrent list as a subject on which the Federal legislative assembly has powers to make laws…The State legislative assembly has express power under the concurrent list to make laws with respect to distribution of electricity, but this power is confined to the making of laws for “the generation, transmission and distribution of electricity to areas not covered by a national grid system within that State”.  As (i) the National Assembly has power to make laws for the regulation of the right to use, work or operate plant etc. for the supply or use of electrical energy; and (ii) the scope for the State legislative assembly to make laws for distribution is restricted to areas not covered by a national grid system, there are no grounds for concern that the State legislative assembly might make laws for the distribution of electricity through the national grid system. Article 4(5) of the Constitution further strengthens this conclusion where it provides that “if any Law enacted by the House of Assembly of a State is inconsistent with any law validly made by the National Assembly, the law made by the National Assembly shall prevail, and that other Law shall, to the extent of the inconsistency, be void.” As the EPSR Act, a Federal Act, gives authority to NERC to regulate all stages of the electricity sector, a State law that is inconsistent with the EPSR Act is void to the extent of the inconsistency.’

It is our considered view that the submission and reasoning expounded by CPCS is faulty in all material particulars. A patient review of section 13 (b) part 11 of the Second Schedule to the 1999 Constitution reveals that the powers of that the National Assembly to make laws on electricity is only confined to electricity Generation and transmission and cannot by any stretch of argument be extended to electricity distribution business. Laws for the distribution of the electricity to the end users having been vested exclusively upon the State House of Assembly by virtue of Section 14 (b) part 11 of the Second Schedule.

It is therefore our submission that if it were the intention of the draft men to vest the National Assembly with the powers to make laws for electricity distribution, Section 13 (b) part 11 of the Second Schedule to the 1999 Constitution would have included electricity distribution. The cardinal principle of interpretation of statute is that which is not specifically included is deemed excluded and therefore the constitution having failed to expressly include electricity distribution under section 13 (b) part 11 of the Second Schedule to the 1999 Constitution has expressly excluded it. See the case of IGP v. ANPP (2007) 18 NWLR (Pt. 1066) 457, 496-7.

To further buttress the fact that electricity distribution was never intended to be legislated upon by the National Assembly, Section 13 (d) of part 11 of the Second Schedule to the Constitution clearly stated that National Assembly can make laws on electricity distribution only in relation to where the Federal Government of Nigeria is in arrangement with another sovereign country for distribution of electricity for any area partly within and partly outside the Federation. This obviously deals with a diplomatic arrangement between Nigeria and its sovereign neighbor country for distribution of electricity within the border area that houses Nigerians and its sovereign neighbor nationals.

In the wisdom of the drafters of the Constitution, the distribution of electricity in a joint border community that will involve dealing with two different nationals, the constitution vested the National Assembly with powers to make laws for collaboration of the Federal Government of Nigeria with the neighbor sovereign country for distribution of electricity in that area.

The clear intention of the drafters of the Constitution is that the State government being closer to the customers, understands the peculiar terrain of the electricity distribution areas, the behavioral pattern of the electricity consumers and their purchasing power thereof and therefore are better placed to make laws for electricity distribution business in their localities.

Furthermore, the definition of transmission in section 15 of part 11 of the Second Schedule as supply of electricity from a power station to a substation or from one substation to another substation clearly show that the National Assembly can only make law regarding establishment of power plants that will feed directly through the transmission line to the distribution substation and all activities from Power Station to the distribution substation and nothing more. Any electricity business activities outside the substation can only be legislated upon by the State Houses of Assembly.

The Constitution by virtue of Section 14 (b) of part 11 of the Second Schedule clearly vested the State House of Assembly to exclusively make laws for distribution of electricity within its states.  Although section 14 (b) stated that state House of Assembly is responsible for generation, transmission and distribution of electricity to areas not covered by a national grid system within the state.

The purport of the section is that the State House of Assembly can make laws for the generation and transmission of electricity to areas not covered by the Grid System within the state. The Grid system is only made to transmit electricity and not for distribution of electricity to end user and therefore where the State House of Assembly makes law regarding the Generation and Transmission of electricity and is in conflict with the Laws made by the National Assembly, the Law made by the State House of Assembly to the extent of its inconsistency will be null and void in accordance with Section 4 (5) of the 1999 Constitution (As Amended).

The provision in the Constitution is clear and unambiguous to the effect that the National Assembly is not vested with the powers to make laws to regulate electricity distribution business from the substation to the end users. It therefore means that it is the State House of Assembly that has the right to set up State Electricity Regulatory Commission that will be vested with the responsibility of setting tariffs, metering of customers and all activities relating to the sale of electricity to end users.

Consequently, it is our submission that Section 62 (1)(d), (2), 67, 71 (4) and 76 of the Electric Power Sector Reform Act 2005 in so far as they relate to electricity distribution to end users are null and void and of no effect. The National Assembly having no powers to make such laws cannot confer the Nigeria Electricity Regulatory Commission of the powers it does not have. Therefore. all regulation made by NERC in exercise of such powers are to that extent null and void and of no effect.  Nemo Dat Quon Non Habet.

I am of the view that the legislation on the electricity distribution in the Electric Power Sector Reform Act 2005 by the National Assembly is a possible breach of the principles of federalism and constitute undue interference with the roles of the State House of Assembly under the constitution.

The state should not sit under the idle excuses that it is the responsibility of the federal government to provide electricity to the people. On the contrary, providing electricity to the people is actually the responsibility of the State governments who rather than take such opportunity to increase economic activities in their state and improve on their internally generated revenue, sees it as a burden, and allow the Federal government and its agencies to hijack its roles and responsibility.

A serious state government should see the state regulation of electricity distribution business as a great opportunity to bring meaningful development to the state and increase its much needed internally generated revenue.

The Attorney General of the States should consider approaching the Supreme Court for the interpretation of the powers of the National Assembly and State Houses of Assembly under Section 13, 14 and 15 of part 11 of the Second Schedule to the 1999 Constitution (AS Amended). This we believe will be that very road to pursue true federalism and economic independence by the states.

 


Chuks Nwani, Legal Practitioner writes from Lagos. The views and opinions expressed in this article are entirely those of the author and do not represent the official policy or position of Legal Business.

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