Electric Power Closer to the People- Can State Governments Legislate on Electricity Distribution? (Part II)
Dr. Ayodele Oni
In the first part of this article, the author shared the background of the policies and laws that influence the development of the power sector and an overview of the federal and state legislatures’ powers to make laws. In this concluding article, the author discusses the influence of the Constitution, the National Grid system, amongst others.
The Constitution and the Powers of the Federal and State Legislature to Make Powers on Electricity Distribution:
The 1999 Constitution (also referred to as the “Constitution” in this part of this write up) places electricity generation, transmission and distribution on the Concurrent Legislative List. Although, both the Federal and State legislatures share legislative powers in respect of matters contained in the Concurrent Legislative List, the powers of the Federal legislature to make laws in respect of matters listed in the Concurrent Legislative List, is limited to those items specifically listed in the first column of Part II and those of State legislatures in the second column. With regard to the electric power sector, Paragraphs 13 and 14 of the Concurrent Legislative List respectively, provide as follows:
- The National Assembly may make laws for the Federation or any part thereof with respect to –
- Electricity and the 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 promotion and establishment of a national grid system; and
- 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.
- A House of Assembly may make laws for the State with respect to –
(a) electricity and the establishment in that State of electric power stations;
(b) the generation, transmission and distribution of electricity to areas not covered by a national grid system within that State; and
(c) the establishment within that State of any authority for the promotion and management of electric power stations established by the State
With regard to electricity distribution, the powers of the federal legislature are limited to making laws for 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’. Relating this to the fundamental principles of the law making powers of the federal and State legislatures, there is a strong argument that the States are empowered to make laws on (a) distribution of electricity to areas not covered by a national grid system within that State and (b) distribution of electricity to areas covered by a national grid system.
My analysis for reaching the foregoing conclusion have already been put forward under the section on the fundamental principles explained above. For ease of reference, States can make laws in connection with matters which are not in the Exclusive List, for which the federal legislature has not been empowered to make laws in the Concurrent Legislative List and or for which States are specifically empowered to make laws on, in other parts of the Constitution (but outside the Concurrent Legislative List). Thus, where a State makes a law which is (a) not in the Exclusive Legislative List; and (b) is not specifically within the purview of the federal legislature in the Concurrent Legislative List, then that law is valid since it is not within the purview of the federal legislature as the federal legislative powers are clear, as adumbrated above.
For State legislatures to be empowered to validly make laws on electricity distribution for areas covered by a national grid system within such States, it is sufficient that neither the Concurrent Legislative List nor the Exclusive Legislative List (or indeed any other part of the Constitution) empowers the federal legislature to make laws on electricity distribution in such areas, in the relevant States. This silence does mean, without prevarication, that there is a residual power of the State to make laws on electricity distribution ‘for areas covered by a national grid system within the State’.
It is further strongly debatable, that in line with the residual power argument above, that the fact that the Concurrent powers of the federal legislature are mentioned, under 13(b) of the Concurrent Legislative List, with the omission of distribution suggests the residual or local nature of electricity distribution and has been completely left for the State legislatures to legislate upon.
Again, a strong argument exists that if it was the intention of the drafters of the Constitution to vest the federal legislature (the National Assembly) with powers to make laws for electricity distribution within States (in areas covered by the national grid) then it will have expressly stated that, taking into consideration the fundamental principles of the law-making powers of the different levels of government. As already analyzed above, a basic principle of interpretation of statutes is that ‘what is not specifically included is deemed excluded’. Hence, to the extent that the Constitution has failed to expressly include electricity distribution under paragraph 13 (b) part 11 of the Second Schedule to the 1999 Constitution, the Exclusive Legislative List or any other portion of the Constitution; has expressly excluded same.
What Does the National Grid System Mean and Can a Possible Definition of Same Change the Conclusion?
The national grid system is understood in Nigeria to cover power stations and transmission, as reference to the national grid system is never really understood to cover distribution. Internationally, a national grid is regarded as a system or network that connects all power plants to ensure that there is electricity, everywhere and such that where a power plant is malfunctioning, another can replace same.
Thus, it is strongly arguable that the national grid system is the supply of electricity from a power station to a sub-station or from one sub-station to another sub-station. It would, therefore, appear that distribution activities outside of the foregoing especially distribution of electricity to end users fall outside the national grid system. Even if we were to assume that the term ‘national grid system’ includes electricity distribution, the powers of the federal legislature with respect to a national grid system are limited to promotion and establishment of same. Thus, it is still strongly arguable that the power to promote and establish is different from powers to make laws regulating activities related to same. Besides the assumption that the national grid system covers distribution activities is weak, whether by international standards or by the generally understood ‘Nigerian’ meaning of the term.
What of the Doctrine of Covering the Field?
The doctrine of covering the field applies in federal systems, where both the federal government and component states can validly make laws regarding a manner (Please refer to A.G Lagos State v. Eko Hotels, (2017) LPELR-43713(SC)). The doctrine applies to ensure that once the federal legislature makes a law which covers the entirety of an issue or matter, the component states and their legislatures cannot again make laws on the same matter as the federal legislature will already have covered the field. The key here is validity of the laws. To the extent that the Constitution and specifically the Concurrent Legislative List are clear as to the extent of each level of government’s powers and the federal legislature cannot validly make laws in connection with distribution outside inter- governmental participation, then there cannot be any conversation or debate around the doctrine of covering the field. In fact, for residual matters, which is the case in the instance of distribution activities outside the participation of the Federation in any arrangement with another country, the federal legislature cannot validly make laws, speak much less of covering the field on the matter.
The writer is of the reasoned view that the provisions of the Electric Power Sector Reform Act, a federal legislature, which relate to electricity distribution to end users are invalid such that the States may make laws which are inconsistent with same and the State laws will stand as it is only validly made federal laws that are capable of taking precedence over inconsistent State laws.
Where the foregoing is the case, the federal legislature having no powers to make such laws cannot confer the Nigeria Electricity Regulatory Commission (NERC) of the powers it does not have to make laws connected with electricity distribution.
Having stated the foregoing, considering that most Discos straddle more than one State, makes it crucial for States and the federal government, via NERC, to collaborate, in the regulation of these electricity distribution companies and electricity distribution generally. These governments too may also not want to upset the applecart and just leave things as they are but work more closely to regulate electricity distribution.
Dr. Ayodele Oni ([email protected]), the author, is a solicitor who specializes in international energy (oil, gas & power) investment law and policy.