LEGAL AND CONTRACTUAL OBLIGATIONS FOR STABLE ELECTRICITY SUPPLY IN NIGERIA

Abstract

Legal and contractual obligations in the Nigerian electricity sector provide the framework that guides the operation of stakeholders in order to ensure stable electricity supply. Previous studies on the Nigerian electricity sector have dealt with the problem of stable electricity supply from purely economic, engineering and scientific point of view, while the legal perspective has been sparsely considered. This study was therefore designed to evaluate the legal and contractual obligations for ensuring stable electricity supply in Nigeria, with a view to identifying the challenges and recommending legal and institutional reforms.

The Socio-legal Theory and Austin’s theory of Legal Positivism guided this study. Doctrinal methodology was used. Legal analyses were drawn from the Constitution of the Federal Republic of Nigeria 1999 (as amended), Electric Power Sector Reform (EPSR) Act 2005, Subsidiary Regulations, Rules and Codes. Unstructured interviews were conducted with three purposively selected senior legal practitioners within the Nigerian electricity industry: one respectively from Nigerian Electricity Regulatory Commission (NERC), Ibadan Electricity Distribution Company (IBEDC), and Federal Ministry of Power.

There were cases of violations of legal and contractual obligations by electricity companies and regulatory bodies. The Constitution of the Federal Republic of Nigeria 1999 (as amended) and the Electric Power Sector Reform (ESPR) Act 2005 revealed that provisions which were made to ensure stable electricity supply are not expressed in a binding form, but are discretional thereby making it difficult for companies to comply with their obligations. The institutions responsible for regulatory and oversight functions were found to be weak because they are not independent and can be controlled and influenced by the political office holders. The NERC, which is meant to be an independent regulatory body, has been negatively affected by the interference from the ministry. There is lack of will by the regulators to enforce the sanctions provided in the EPSR Act; such as name-shaming, warning, fines, suspension and cancellation of licences, without having recourse to the minister in charge of power. Therefore, ensuring compliance with regulations and directives in the electricity sector has not been prioritised.

The legal and contractual obligations for electricity supply in Nigeria have not been guaranteed. Ensuring compliance with these obligations remains a regulatory challenge in Nigeria, which need to be addressed through a legal reform. Strict measures such as suspension and cancellation of licencesshould be implemented in deterring defaulters. Regulatory independence should be strengthened by ensuring that regulatory institutions do not have recourse to the political office holders in making decisions.