The Nigerian Constitution, States and Electricity Regulation (Pt 2)
In the last edition, we began the series on the doctrine of covering the field and its application to the Nigerian Electricity Supply Industry, particularly as regards the powers of component Nigerian States to validly legislate upon and regulate matters related to electricity supply in their various States.
We had specifically stated that, in countries which practice constitutional democracy, the constitution is the fundamental law of such countries. Furthermore, we had also specifically stated that Nigeria’s Constitution places electricity generation, transmission and distribution on the Concurrent Legislative List. Though, we quickly recognized the fact that, unlike the pre- 1979 Constitutions, in particular, the sharing of powers by the Federal and State legislatures in respect of matters contained in the Concurrent Legislative List, is limited to those items specifically endowed such level of government. Therefore, there is no blanket covering the field principle. Please recall that the doctrine of covering the field means that to the extent that the National Assembly has validly legislated on a matter comprehensively, any law made by a State Assembly is suspended until that federal legislation is repealed.
We continue our analysis this week with our concise review of Paragraphs 13 and 14 of the Concurrent Legislative List, respectively. Section 13 of the 1999 Constitution specifies that 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 same Constitution specifies in Paragraph 13 that the National Assembly could make laws from the generation and transmission of electricity in or to any part of the Federation and from one State to another State. Further, the National Assembly is empowered to make regulation in relation to 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. Additionally, the National Assembly is empowered to make laws relating to 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.
Added to the foregoing, the National Assembly may make laws for 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.
Paragraph 14, however, specifies that a House of Assembly may make laws for the State with respect to electricity and the establishment in that State of electric power stations. Each State House of Assembly is also empowered to make laws for the generation, transmission and distribution of electricity to areas not covered by a national grid system within that State. Further, the Constitution empowers the establishment within that State of any authority for the promotion and management of electric power stations established by the State.
Taking the review a notch further, Section 4 (5) of the Constitution stipulates 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. The effects of the combined reading of items 13 and 14 of the concurrent legislative lists are that the states can only legislate upon and take corresponding action in relation to the generation, transmission and distribution of electricity to areas not covered by a national grid system within that State and that no state can make laws on the foregoing issues, to the extent that the federal government has made a comprehensive law(s).
The ordinary effect of the foregoing, therefore, is that to the extent that there is the transmission grid and the Electric Power Sector Reform Act which covers issues from generation, transmission and distribution and supporting regulations, component Nigerian States/ States of the Federation, cannot act inconsistent with those laws and build their own distribution or transmission systems without going through the Nigerian Electricity Regulatory Commission, a federal body. It would, therefore, constitutionally, be difficult, if not impossible to achieve what some of the States of the Federation want to do as neither the regulators nor the federal government would play ball.
In real life, though, there are opportunities for companies to develop embedded generation under the relevant regulations such that the plant is close to the distribution network which serves the load center.
There is also the opportunity for independent electricity distribution networks in areas not already covered by distribution networks. Therefore, really, all that is needed are investments in these areas instead of considering dispensing with the national grid as even that has its repercussions. It is germane to note that it is not at the moment, viable to have embedded generation plants in every Nigerian component State; at least for now. Also not every component Nigerian State currently has the capacity to self-generate electricity. It is, therefore, the national grid that would most efficiently serve a large section of the Nigerian people.
We shall conclude our analysis in the next edition, with relevant judicial precedents and further analysis on the doctrine of covering the field and its applicability to the power sector. For more information about the electric power in Nigeria, read the text, “The Nigerian Electric Power Sector: Policy. Law. Negotiation Strategy. Business” by Ayodele Oni.
Ayodele Oni (ayodeleoni@outlook.com), a solicitor specialises in international energy (oil, gas & power) investment law and has a mini MBA in power & electricity. You can follow me on twitter @ayodelegoni.