States reject Electricity Amendment Bill over N5tn subsidy debt

States reject Electricity Amendment Bill over N5tn subsidy debt

The Forum of Commissioners of Power and Energy in Nigeria (FOCPEN) has cautioned that the proposed Electricity Act (Amendment) Bill, 2025, under consideration by the Senate, will saddle electricity consumers with over N5tn in unpaid subsidies.

This, they said, would threaten affordability and deepen inequity in electricity access across the country.

FOCPEN, in a statement jointly signed by its Chairman and Commissioner for Power and Renewable Energy in Cross River State, Prince Eka Williams, and its Secretary and Commissioner for Power, Renewable Energy and Transport in Benue State, Barrister Omale Omale, said the bill, if passed, would worsen the financial strain on both consumers and the government.

“By this provision, the amendment bill would also transfer over N5tn in unpaid subsidies to electricity consumers, worsening affordability and equity in electricity access,” the statement read.

The Forum argued that the bill mandates the establishment of new federal agencies and funds such as the Power Consumer Assistance Fund (PCAF), whose administrative and operational costs would be passed directly to consumers via tariff surcharges.

They warned that this provision effectively entrenches a subsidy regime, even in states that have implemented cost-reflective tariffs tied to improved service delivery.

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“The imposition of additional financial burden on electricity customers already struggling with high electricity tariffs for Band A service is unacceptable. Especially when States are actively pursuing reforms to create sustainable electricity markets,” the forum stated.

Highlighting fiscal concerns, FOCPEN stressed that the reintroduction of a centralised subsidy structure contradicts current government efforts to phase out wasteful subsidies.

According to the forum, electricity subsidies cost the federal government N1.94tn in 2024 alone, and total accumulated subsidies have surpassed N5tn funds which remain unpaid and continue to undermine the viability of the power sector.

“At a time when President Bola Ahmed Tinubu’s administration is striving to end unsustainable and wasteful energy subsidies, the electricity amendment bill 2025 surprisingly seeks to entrench a subsidy regime,” the commissioners said.

FOCPEN further argued that the proposed bill comes at a time when the 2023 Electricity Act is still in its early stages of implementation.

Many states, the group noted, have only just begun to operationalize their electricity laws and establish state-level electricity markets in line with the decentralised framework introduced by the 2023 Act.

The Forum has, therefore, called on the National Assembly to halt further deliberations on the bill.

It warned that its passage could derail the ongoing reform agenda and place additional financial burdens on both the federal and state governments, as well as already overburdened electricity consumers.

States reject Electricity Amendment Bill over N5tn subsidy debt