On the 17th March 2023, President Muhammadu Buhari assented to the Constitutional Alteration Bill No. 33, seeking to alter the Constitution of the Federal Republic of Nigeria, 1999 to allow States generate, transmit and distribute electricity in areas covered by the National Grid; and for related matters, following the concurrence of State Houses of Assembly, effectively making it an Act. The Bill ushers in a new epoch of State Electricity Markets, a remarkable development in the NESI post-privatisation, allowing States to license, generate, transmit and distribute electricity in areas covered by the National Grid. Prior to this development, electricity generation, transmission and distribution in the areas not already covered by the National Grid was under the Concurrent Legislative List, thus allowing the Federal and State Governments to legislate on.
Hitherto, arguments were rife that the federalization of grid-connected electricity markets in Nigeria has hindered States that want to accelerate growth within their boundaries to do so. On the other hand, some have cited the inability of the States to leverage their right to generate, transmit and distribute electricity in off-grid areas in making a case for continued centralisation. In any case, we set out to analyse the Constitutional amendment ushering in decentralisedelectricity markets, and its potential impacts on the NESI.