LAGOS STATE ELECTRICITY LAW, 2024

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LAGOS STATE ELECTRICITY LAW, 2024

LAWS OF THE FEDERATION OF NIGERIA

A LAW TO PROVIDE FOR THE ESTABLISHMENT AND ADMINISTRATION OF THE LAGOS STATE ELECTRICITY MARKET, ESTABLISH A COMMERCIAL AND TECHNICAL REGLILATORY FRAMEWORK FOR THE LAGOS ELECTRICIT’Y MARKET, THE LAGOS STATE ELECTRIFICATION AGENCY AND THE LAGOS STATE ELECTRIFICATION FUND AND FOR CONNECTED PURPOSES.

ARRANGEMENT OF SECTIONS

1.     Interpretation

2.     Objectives of the Law

PART I: DEVELOPMENT AND ADMTNISTRATION OF THE LAGOS ELECTRICITY MARKET

3.     The Role of the Ministry

4.     The Powers of the Ministry

PART II: THE LAGOS STATE ELECTRICITY REGULATORY COMMISSION

5.     Establishment of the Lagos State Electricity Regulatory Commission

6.     Policy Directives to the Commission

7.     Composition of the Commission

8.     Appointment of Executive Members of the Commission

9.     Appointment of Non-Executive Members of the Commission

10.    Tenure of Office of Members of the Commission

11.    General Rules Applicable to the Appointment of Members of the Commission

12.    Disclosure of Interest

13.    Suspension or Removal of Members of the Commission

14.    Vacancy

15.    Remuneration and Allowances

16.    Proceedings of the Commission

17.    Code of Ethics for the Commission

18.    Powers of the Commission

19.    Functions of the Commission

20.    Power of the Commission to hold hearings

21.    Power to Co-opt

22.    Proceedings of the Commission

23.    Delegation of Powers of the Commission

24.    Meetings of the Commission

25.    Quorum

26.    Voting

27.    Committees of the Commission

28.    Decisions. Directives and Orders of the Commission

29.    Appeal on the Review of the Commission’s Decision, Directive or Order

30.    Non-compliance with Directions made by the Commission

31.    Consultations with Stakeholders

32.    Advisory Forums

33.    Legal Adviser to the Commission

34.    Secretary to the Commission

35.    Operation of Full-Service Internet Portal and Publication

36.    Administration and Management of the Commission

37.    Staff of the Commission

PART III: THE COMMISSION – FINANCIAL PROVISIONS, MONITORING AND REPORTING

38.    Funds of the Commission

39.    Application of Funds

40.    Compliance with Procurement Law

41.    Annual Estimate

42.    Audit

43.    Report of the Commission

44.    The Lagos Electricity Market Report

PART IV: THE LAGOS INTHGRATED ELECTRICITY POLICY AND STRATEGIC IMPLEMENTATION PLAN

45.    The Lagos Integrated Electricity Policy and Strategic Implementation Plan

46.    Monitoring the Revision, Management and Implementation of the Lagos Integrated Electricity Policy and Strategic Implementation Plan

47.    Duration, Review and publication of the Lagos Integrated Electricity Policy and Strategic Implementation Plan

48.    Framework for Procurement of Electricity and Ancillary Service

PART V: ELECTRICITY LICENCES

59.    Restriction on Electricity Services Without Licence

50.    Exemptions

51.    Application for Grant of Licence

52.    Refusal of Licence

53.    Approval of the Commission required by Licensee

54.    General or specific conditions applicable to Licensee

55.    Revocation of Licence

56.    Terms and conditions of Licences

57.    Non-Exclusivity for Licensed activity

58.    Exclusivity for Licensed activity

59.    Modification of terms and conditions

60.    Duration of Licences

61.    Renewal of Licences

62.    Restrictions on transfer of Licences

63.    Withdrawal, suspension or revocation of Licences

64.    Procedure for withdrawals, suspension or revocation of Licences

65.    Review of Licensee’s Operation

66.    Separation between each Business Segment

67.    Enforcement

68.    Failing Licences

69.    Licensing Regulations

70.    Publication and Register of Licences

PART VI: GENERATION LICENCE

71.    Grant of a Generation Licence

72.    Activities under a Generation Licence

73.    Service obligation of a Generation Licensee

74.    Captive Generation in excess of IMW

PART VII: TRANSMISSION LICENCE

75.    Grant of a Transmission Licence

76.    Activities under a Transmission Licence

77.    Service obligation of a Transmission Licensee

78.    Other business of Transmission Licensee

PART VIII: TRADING LICENCE

79.    Grant of a Trading Licence

80.    Activities under a Trading Licence

81.    Service obligations of a Trading Licensee

PART IX: DISTRIBUTION LICENCE AND SUPPLY LTCENCE

82.    Grant of a Distribution Licence

83.    Activities under a Distribution Licence

84.    Service obligations of a Distribution Licensee

85.    Grant of a Supply Licence

86.    Activities under a Supply Licence

87.    Service obligations of a Supplv Licensee

88.    Separation of Carriage and Supply

89.    Unauthorised use of Licence

PART X: INVESTIGATTON AND ENFORCEMENT

90.    Assessment

91.    Default Approvals

92.    Requirements regarding Generating Plant

93.    Power of Entry, Inspection and Calling for Returns

94.    Breaking up of streets by Licensees

95.    Liability of licensee for damage or injury

PART XI: THE LAGOS ISO

96.    Lagos ISO

97.    Formation and structure of the Lagos ISO

98.    Tenure of Governing Board of Lagos ISO

99.    Activities of the Lagos ISO

100. Service Obligations of the Lagos ISO

101.  The Market Rules

PART XII: TARIFF REGULATIONS

102.  General Tariff Regulation

103.  The Electricity Supply Code

101.  Principles guiding Tariff Methodologies

105.  Procedure for adoption of Tariff Methodology

106.  Tariffs and Charges by Licensees

107.  Tariff Regulations

108.  Vesting of Utility Purchaser

109.  Determination of Tariff

110.  Publication of Tariff Methodology, Tariffs and Charges

PART XIII: MARKET REGULATION, INDUSTRY STANDARDS AND CODES AND CONSUMER AFFAIRS

111.  Market Regulation

112.  Industry Standards and Codes

113. Consumer Protection Standards, Practices and procedures

PART XIV: EMISSIONS CONTROL, RENEWABLE ENERGY, ENERGY EFFICIENCY. AND DEMAND SIDE MANAGEMENT

111. Functions of the Commission under this Part

115. General Responsibility of the Ministry

116.  Renewable Energy, Energy Efficiency and Demand Side Management Strategy and Action plan

117.  Promotion of Renewable Energy, Energy Efficiency and Demand Side Management

118.  Emissions Standards Permit Fee

PART XV: OFF-GRID ELECTRIFICATION AND CONNECTED MATTERS

119.  General Responsibility of the Government in connection with Off-Grid Solutions

120.  The Off-Grid Electrification Strategy and Action plan

121.  Establishment of the Lagos State Electrification Agency

122.  Functions of the Agency

123.  Consultation by the Agency

124.  Relationship with the Commission

125.  Establishment and Composition of the Lagos State Electrification Agency Governing Board

126. Appointment of the Chairperson and Members of the Board

127.  Tenure of Office

128.  Cessation of Office of Members of the Board

129.  Vacancy

130.  Meetings of the Board

131.  Powers of the Board

132.  Code of Ethics for the Agency

133.  Proceedings of the Board

134.  Validity of Proceedings

135.  Quorum

136.  Voting

131.  Power to Co-opt

138.  Disclosure of Member’s Interest

139. Delegation by the Board

140.  Committees of the Board

141.  Remuneration and Allowances

142.  General Manager of the Agency

143.  Legal Adviser

144.  Secretary of the Agency

145.  Staff of the Agency

146.  Delegation of functions by the Agency

147.  Common Seal of the Agency

148.  Fund of the Agency

149.  Power of the Agency to borrow

150.  Financial Provisions

151.  Establishment of the Lagos State Electrification Fund

152.  Utilisation of the Electrification Fund

153.  Special Purpose Funds

154.  Restriction on Execution against Monies in the Electrification Fund

155.  Maintenance of Proper Accounts and Records

156.  Bank Account

117.  Audit of the Accounts and Records of the Agency

159.  Restriction on Execution on the Agency’s Installation

PART XVI: POWER ENFORCEMENT UNIT. OFFINCES AND PENALTTES PROVISIONS

160.  Establishment of the Power Enforcement Unit

161.  Functions of the Power Enforcement Unit

162.  Powers of the Power Enforcement Unit

163.  Electricity theft

164.  Electric supply without consent or authorisation

165. Theft of Electric Lines Materials etc.

166. Theft of Transmission or Distribution Lines and Materials

167.  Damage to Electricity Infrastructure

168.  Hindering, Obstructing, Interfering and Impersonation

169.  Illegal Use of Electricity

170.  Offences by Incorporated Entities

171.  General Conventions and Penalties

172.  Whistle Blowing Provisions

173.  Criminal Jurisdiction

PART XVII: HOST COMMUNITIES DEVELOPMENT TRUST FUND

171.  Host Communities Development Trust Fund

175.  Account, Audit and Annual Report of the Community Trust Fund

176.  Restriction on use of Infrastructure

177.  Power to make Regulations

PART XVIII: TRANSITION TO THE LAGOS ELECTRTCITY MARKET

178.  General Transitional Provisions

119.  Alternative Dispute Resolution Framework

180.  Procedure for Cause of Action

181.  Exemption from Liability

182.  Saving and Transitional Provisions Applicable to the Agency

183.  Repeal

184.  Citation and Commencement

LAGOS STATE ELECTRICITY LAW, 2024,

LAW NO. 3, 2024

ASSENTED TO AT IKEJA, THIS 3RD DAY OF DECEMBER, 2024

MR. BABAJIDE OLUSOLA SANWO-OLU

A LAW TO PROVIDE FOR THE ESTABLISHMENT AND ADMINISTRATION OF THE LAGOS ELECTRICITY MARKET, ESTABLISH A COMMERCIAL AND TECHNICAL REGULATORY FRAMEWORK F’OR THE LAGOS ELECTRICITY MARKET, THE LAGOS STATE ELECTRIFICATION AGENCY AND THE LAGOS STATE ELECTRIFICATION FUND AND F’OR CONNECTED PURPOSES.

[COMMENCEMENT]              [3RD DECEMBER, 2024]

THE LAGOS STATE HOUSE OF ASSEMBLY enacts as follows:

1.     Interpretation.

In this Law, unless the context otherwise requires —

“Affiliate” in relation to a licensee means any entity directly or indirectly controlling, controlled by or under common control with the licensee, and unless the Commission decides to the contrary, control shall be presumed to arise from the ownership of or the power to vote, directly or indirectly, ten (10) percent or more of the voting securities of an entity;

“Agency” means the Lagos State Electrification Agency established under this Law;

“Ancillary services” means services required or provided for the security or reliability of the electricity system;

“Bulk purchase” means a contract for purchase of electricity of a minimum capacity of 10 MW, or such other threshold as the commission may specify by regulation;

“Bulk consumer” means a person who has a connected load of 1MW or more of electric power or such other threshold as the commission may specify by regulation, for its own use and not for sale or resale;

“Attorney-General” means the Honourable Attorney-General and commissioner for Justice of the State;

“Captive generation” means generation of power from plant owned and operated by an entity for its own use;

“Commissioner” means the Commissioner for Energy and Mineral Resources or any other member of the State Executive Council for the time being charged with the responsibility for the Management of Energy and Mineral Resources in the State;

“Consumer group” means a group of consumers receiving supply at the same location or premises, such as a residential estate or a shopping centre, whose aggregate load, at full capacity, exceeds 1 min;

“Court” means Magistrate Court or High Court of Lagos State;

“Demand side management” or (DSM) means the act of reducing electricity consumption or moving electricity usage from peak to off-peak periods in order to reduce overall energy costs;

“Distillates” includes fuel oils, gasoline, diesel, gas oil, kerosene and such other elements that can be used for heating for the purpose of electricity generation,

“Distribution” means the distribution of electricity by a licensee authorised to own, operate, manage or control electricity system it includes ownership, operation, management or control of a distribution system for the delivery of electricity;

“Distribution system means a system consisting wholly or mainly of electric lines and associated facilities less than 132kV used for the delivery of electricity, and includes any plant, apparatus, site, building, structure, machinery, equipment and all other accessories operated or used for that purpose but shall not include any part of a transmission system;

“Document” includes written or printed electronic information or records;

“Electricity consumer” means any end-user of electricity within the State;

“Electricity system” means all aspects of any network of electrical components for the generation, transmission, distribution, supply and use of electricity; and it includes a system under the control of a generating company or licensee, as the case may be, having one or more—

(a)    generating stations;

(b)    transmission lines; or

(c)    electric lines and sub-stations;

“Energy efficiency” means the act of using less electricity to perform the same task or to get the same end value, including the application of technology;

“Energy service provider” means a person who delivers energy services or other energy efficiency and demand side management improvement measures in a facility or premises;

“Federal Government” means the Federal Government of Nigeria;

“Gas” includes piped natural gas, liquefied natural gas, liquefied petroleum gas and compressed natural gas for use as fuel, for heating and electricity generation;

“Generation” means the production of electricity and other generation products and ancillary services at a generating station;

“Generating station” means any site, building, structure, plant, machinery equipment and all accessories used for, or for purposes connected with the generation of electricity and other generation products and ancillary services;

“Grid code” means the code or other instrument, detailing the instructions, rules, procedures, guidelines, for the operation and planning of an interconnected power system comprising the Lagos Electricity Market, and the accounting requirements relating to it;

“Guarantees of origin” means a document aimed at providing evidence that a particular share or a certain amount of energy is generated from renewable energy sources;

“Hearing” includes resolution of disputes, complaints, petition or any other matter arising out of the decisions of the Commission;

“House” means the Lagos State House of Assembly;

“Incumbent Distribution Licensee” means a person who, immediately prior to the commencement of this Law, is the holder of a licence issued by NERC to distribute electricity in any part of the State;

“Incumbent Distribution Undertaking” means the functions, property, interest in property, rights and liabilities of the incumbent distribution licensee relating to distribution of electricity;

“Incumbent Supply Undertaking” mean the functions, property, interest in property, rights and liabilities of the incumbent distribution licensee relating to the supply of electricity;

“Infrastructure” means electricity system owned, controlled and/or used by any of the licensee including but not limited to the Transmission system and Distribution System;

“Lagos Electricity Market” means the electricity market established for the State by this Law under the regulated activities of the commission.

“Lagos Independent System operator” or “Lagos ISO” means the independent system operator established pursuant to this Law;

“Licence” means a document issued by the Commission to a legal entity pursuant to this Law, confirming rights and obligations on that entity to perform regulated activities in the State in accordance with the terms and conditions stipulated in the licence;

“Market participant” means any person registered in accordance with the Market Rules to participate in the Lagos Electricity Market;

“Market Rules” means the rules made or modified pursuant to this Law for the reliable and efficient operation of the Electricity Market;

“Meter” means any device used for measuring the flow of electricity;

“Ministry” means the Lagos State Ministry of Energy and Mineral Resources;

“National Electricity Market” means the electricity market established under the Electricity Act and under the regulatory purview, of NERC;

“National Grid” means any electrical power system that transcends the boundaries of one or more States in Nigeria or that is connected to a country outside Nigeria for the purpose of electricity generation, transmission, system operator, distribution, supply and trading;

“Negotiated Transaction” means an arrangement for the supply of electricity to a consumer or a consumer group undertaken under a contract and upon terms and conditions including tariff and duration of supply, agreed between the parties on a willing-seller and willing-buyer basis;

“NEMSA” means the Nigerian Electricity Management Services Agency established under the Electricity Act;

“NERC” means the Nigerian Electricity Regulatory Commission established under the Electricity Act;

“Net-metering” means a mechanism for self-generators to sell or be otherwise credited with the value for the excess power generated and added to the State grid;

“Off-Grid Electrification Strategy and Action Plan” means the strategy and action plan made, reviewed, amended or modified pursuant to this Law;

“Off-grid solutions” means electricity supply from an electricity, system (including through renewable energy sources) that is not connected to an electricity system controlled by the system operator or the Lagos ISO;

“Power Enforcement Unit” means the enforcement unit of the Agency constituted pursuant to this Law;

“Power system” means all aspects of electricity system including supply of electricity or any of the following —

(a)    generating stations;

(b)    transmission or main transmission lines,

(c)    sub-stations;

(d)    tie-lines;

(e)    load dispatch activities;

(f)     mains or distribution mains;

(g)    electric supply-lines;

(h)    overhead lines;

(i)     service lines; and

(j)     works;

“Pre-Existing Licensee” means entities licensed by NERC or NEMSA to operate within the State before the commencement of this Law;

“Regulated activity” means each of the activities specified in this Law in each case carried out over or through the operation by any party in one or more locations, of apparatus which, save in the case of a supply licence, have a production or electrical capacity that exceeds, in the aggregate, 1000 KW;

“Regulatory sandbox” means a framework that allows entities to test-run innovative products, services, solutions and business models within the Lagos Electricity Market;

“Relative” means parent, spouse, child, brother, sister, uncle, aunt, in-laws, cousins, and where applicable, their spouses;

“Renewable energy sources” means energy sources that is renewed by natural processes and includes solar, wind, water, biomass, biogas, geothermal, wave, tidal and such other energy sources as may be prescribed by the Commission pursuant to regulations made under this Law;

“Renewable energy purchase obligation” means a requirement for a licensee to purchase or produce a minimum specified quantity of its requirements from renewable energy sources;

“State” means Lagos State of Nigeria;

“State grid” means any electrical power system within the State for the purpose of electricity generation, transmission, system operation, distribution supply and trading;

“Supply” in relation to electricity, means the sale of electricity to consumers;

“Supply Service” means services provided in connection with the supply of electricity to consumers;

“Tariff” means the applicable prices, rates or charges under this Law or Regulations made under it, for the provision of a particular service or group of services, including any applicable terms and conditions;

“Trading” means any form of marketing, brokering or intermediation or in the sale of electricity or ancillary services, whether or not it entails the purchase of electricity or ancillary services for resale, or whether or not title or custody is taken to the electricity or ancillary services sold;

“Transitional period” means the period prescribed by the Commission for the transition of the Lagos Electricity Market to more competitive trading arrangements or, in the absence of such prescription by the Commission, the second (2nd) anniversary of the commencement of this Law;

“Transmission” means the conveyance and transmission of electricity from generation plants through transmission system by the licensee authorised to own, operate, manage or control transmission; (ownership, operation, management or control of a transmission system for the conveyance of electricity); and

“Transmission system” means a system consisting wholly or mainly of electric lines and associated facilities of greater than or equal to 132KV used for the conveyance of electricity, and includes any plant, apparatus, site, building, structure, machinery, equipment and all other accessories operated or used for that purpose; and

“Utility, means any or all the assets, business and property of a licensed company.

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