The Forum of Commissioners of Power and Energy in Nigeria (FOCPEN) has raised concerns over the proposed Electricity Act (Amendment) Bill, 2025, currently under deliberation in the Nigerian Senate, warning that its passage could transfer over N5 trillion in unpaid electricity subsidies to consumers.
This was contained in a statement jointly signed on Wednesday by the Chairman of FOCPEN and Commissioner for Power and Renewable Energy, Cross River State, Prince Eka Williams, and the Secretary of the Forum and Commissioner for Power, Renewable Energy and Transport, Benue State, Barr. Omale Omale.
The statement read in part, “The amendment bill proposes the creation of numerous federal institutions, agencies and Funds, whose operational and administrative costs are to be directly passed on to electricity consumers, thus resulting in higher electricity tariffs for consumers. 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 cost-reflective tariffs tied to improved quality of service.”
The Forum further stated that the bill specifies mandatory contributions from consumers and market participants to fund the Power Consumer Assistance Fund (PCAF) under which consumers, including those in States with cost-reflective tariffs, would bear the cost of subsidies through tariff surcharges, even in the face of widespread non-payment and market losses.
“By this provision, the amendment bill would also transfer over N5 trillion in unpaid subsidies to electricity consumers, worsening affordability and equity in electricity access,” the Commissioners stated.
Bill to exacerbate FG, states’ financial burdens
The Forum further noted that the bill may further exacerbate the federal government and states’ financial burdens by attempting to reestablish the subsidy regime.
According to the Forum, “At a time when the administration of President Bola Ahmed Tinubu is striving to end unsustainable and wasteful energy subsidies, the electricity amendment bill 2025 surprisingly seeks to entrench a subsidy regime in the power sector.
“It should be noted that electricity subsidies gulped N1.94 trillion in 2024 alone! The total accrued electricity subsidies of more than N5 trillion remain unpaid, crippling the power sector and making it unviable for private sector investments.
“The amendment bill, if passed, will further exacerbate the financial burden on the federal government and States, undermining efforts to achieve a sustainable and self-financing power sector,” the Forum stated.
The Forum said this is not the opportune time for an amendment to the Electricity Act 2023, as the Act is still in its early implementation phase.
According to the group, “several States have commenced the process to operationalize their electricity laws and create viable state electricity markets.”
The Forum called on the National Assembly to halt further consideration of the bill.
N5 trillion, a lot of money to be added to the tariff paid by consumers – expert says
Founder and Chief Executive Officer of New Hampshire Capital Limited, Odion Omonfoma, in an interview with Nairametrics, stated that the PCAF arrangement under the Amendment Bill will be responsible for overseeing the transfer of subsidies back to the consumers. According to him, that is a lot of money to be paid by the Nigerian electricity consumers.
He said, “PCAF is in the original Act, but it wasn’t specified how the Fund was going to operate. What the Amendment Bill now does is that there will be mandatory contributions from the electricity customers to the Fund.
“With mandatory contribution, the question is: Is it an addition to the tariff or what? Obviously, an addition. The long and short is, PCAF will be responsible for seeing how to transfer the N5 trillion subsidies to electricity consumers. And that will obviously be added as part of your tariffs. N5 trillion is a lot of money to be added to the tariff to be paid by Nigerian consumers, especially where the subsidy regime was not what they benefited from. If you are giving me a subsidy, that means I enjoyed the goods,” he stated.
Backstory
Earlier this month, the Senate passed the Electricity Act (Amendment) Bill, 2025 through second reading, as part of efforts to rescue Nigeria’s struggling power sector from imminent collapse.
Sponsored by Senator Enyinnaya Abaribe (Abia South), the amendment aims to overhaul the 2023 Electricity Act by addressing regulatory loopholes.
During the debate, some lawmakers also proposed capital punishment for individuals convicted of vandalizing power infrastructure.
“Electricity is an essential service. No one should hold the country to ransom under the guise of a strike. We must remove ambiguities and make the law implementable,” Abaribe stated.
The bill proposes a range of reforms, including:
- Criminalising electricity infrastructure vandalism;
- Clarifying the transfer of regulatory power from NERC to state governments;
- Enhancing the operationalisation of the Electricity Consumer Assistance Fund;
- Strengthening penalties and institutional oversight.
What you should know
In June 2023, President Tinubu signed the Electricity Act 2023 into law, repealing the Electric Power Sector Reform Act, 2005.
- This Act decentralizes the power sector, giving states authority to regulate electricity within their territories.
- Over 16 states began passing their own electricity laws and setting up state regulatory commissions.
- Experts have cautioned that the attempts to amend the 2023 Electricity Act could erode investor confidence in Nigeria’s power sector.
