New Electricity act: Energy thieves to pay up to 6 times stolen energy – Nosa Igbinedion

The newly signed Nigeria Electricity Act will allow states to create regulations and laws that can guide their operations within that state.

It will also see more punitive measures and incentives to investors to reduce incidents of theft, which caused N100 billion in Nigeria’s electricity industry. 

This was disclosed by Nosa Igbinedion, CEO of West Power and Gas, majority shareholders of Eko Electricity PLC at the Nairametrics webinar on the Electricity Act. 

He added that the act makes a provision to charge you for what you stole and at least 3 times that and repeat offenders can pay 6 times what was stolen. 

Energy Theft 

Nosa stated that with Nigeria and her population, we can make fantastic laws but where we struggle is implementation, he added: 

• “In the opportunities and opening the market to decentralization, you will lose a bit of economics of scale, so prices and costs may be a lot more, this means a lot more people will find it much more difficult to pay and find other means, I would dampen it down a bit, the real stuff is in execution,  
• “The reality is, for investors to come in, we need to have the right templates, but to keep them long term, projects need to work, we need to execute and show, whoever is designing the electricity market, it has to work, but attract local and international markets, 

Energy Losses 

He added that in Nigeria, we have an average of 45% ATC losses which are technical commercial losses, which amount to N100 billion a year, adding: 

• “A large chunk is commercial losses, basically people who have bypassed and nor captured, free riding or deliberately bypassing, a product 45% is lost before your account for it, the business process would go out if you don’t fix those issues, 
• “To help tackle the problem, the discussion around the new act and changing things started from energy theft and morphed into other things that were lacking, but speaking the act section 208, there are clear provisions on tackling energy theft. 

He noted that states now have the opportunity to create regulations, and laws that can guide their operations within that state, you could see more punitive measures and incentives to investors to reduce incidents of theft. 

• “Meaning if we are producing 45000 MW, we are losing about 18000MW to theft, nearly N100 billion in losses,  

 Punishments 

He highlighted that a breakdown in the act, first offenders would pay 3 times the value of the energy they have stolen, adding that the act makes a provision whoever it is, has the power to not only charge you for what you stole but at least 3 times that, repeat offenders can pay 6 times what was stolen.

• “Previous act was not so specific about energy theft, this new act has almost 19 different explanations one energy theft, also envisages a system where state attorney generals can put structures in place to accelerate the prosecution of energy theft, what you would find is that you beyond o see almost like power tax force, and specialized courts to fast track the process. 

Opportunities 

He also noted that with the smaller structure and decentralized role, states have many roles to play in fighting theft. 

• “You begin to see decentralized models where neighbours can hold neighbours accountable, and that is the only way to keep projects sustainable. We need to get our hands dirty and get to the root of the problem of vandalism. 

He also noted that with vandalism, in the last 18 months, the 2 discos in Lagos have suffered vandalism over N10 billion, adding that people go with thugs to dig up cables to sell in the open market, vandalize transformers for mercury,

• “The level of vandalism is quite high and losing assets day to day to vandals, and the act provides enough provisions and allows states to make new laws and allows communities to show people we must change how we run our systems. 

What you should know 

The Renewable Energy Association of Nigeria (REAN) said that the 2023 Electricity Act will help to unlock more clean energy investments in Nigeria if fully implemented, through public-private partnerships, feed-in tariffs, and many others.

Association president, Dr Segun Adaju said that the Act empowers Nigeria’s renewable energy sector in several ways:

Private-public sector partnerships 

Dr Adaju said that the 2023 Electricity Act promotes private-public sector partnerships and allows the private sector to participate fully in the renewable energy space.

He pointed out that the Act allows the private sector to catalyze investments.

According to him, public funds are mostly caught up on a stringent budget, leaving the private sector to jumpstart sectors, in this case, the Nigerian renewable energy sector.

Feed-in tariffs   

Dr Adaju stated that a review of climate financing in the last 7 to 10 years shows that the private sector has always been leading in terms of real investments in renewable energy.

He also said that the Electricity Act has created a framework where renewables will be priced appropriately.

He emphasized that under the implementation of the Act, renewables will be priced at cost-reflective considerations, this is because of the cost-reflective feed-in tariff that will be put in place.

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