Electric Power Closer to the People - Can State Governments Legislate on Electricity Distribution? (Part I)

Recently, there have been debates on the Constitutional powers of State governments in Nigeria (States used in the sense of component parts of Nigeria, as an instance, Lagos State), to make laws relating to electricity distribution within their States. This debate has particularly come to the front burner because of the proposed policy of Lagos State which raised that point.

Whilst I believe there is the need to, via an Originating Summons, have the courts interpret the Constitution, and States may, at some point, have to do this. I will attempt an analysis in this paper, nonetheless. My analysis, however, should not be taken as legal advice but just my views on the subject.

Background

In the drive towards the actualisation of a liberalised power sector in Nigeria, major policy directives were introduced by the Federal Government ( the “FG”) to underscore the FG’S commitment towards instituting a liberal, commercially viable and performance-driven electricity sector. Primary among these policies included the National Electric Power Policy, 2001 (“NEPP”) and the Nigerian National Energy Policy 2003 (“NEP”). The fundamental thrust of the NEPP was to expand the power sector in Nigeria through the injection of private investments under the instrumentality of the National Council on Privatisation (“NCP”). The NCP set up an Electric Power Sector Reform Implementation Committee (“EPSRIC”) which defined the three principal phases for achieving the reform goals of a reliable and sufficient electricity supply system.

The first step aimed at the privatisation of the verticallyintegrated behemoth, the National Electric Power Authority (“NEPA”) at that time, was the introduction of Independent Power Producers (“IPPS”) as well as private emergency power producers. The second step focused on increasing the competition between market participants, reduction of subsidies (i.e. payment of full fuel prices) and sale of excess power to Distribution Companies (“Discos”). During the last phase, the market and competition would even be more intensified by full- cost pricing of supply, liberalised selection of suppliers, beyond the local Discos, by larger customers and fully competitive market trading.

The NEPP is considered the harbinger of the reformed power sector in Nigeria as we know it today. The general aims and objectives of the reforms as gleaned from the NEPP encompass- the establishment of an independent regulator to oversee the affairs of the sector; and the promotion of competition transparency and efficiency within the Nigerian electricity supply industry; increasing private sector investments in the electric power sector; meeting current and future electricity demand of the populace; and the establishment of new market structure/rules and trading arrangement(s). The NEPP also defined the three principal phases for achieving the reform goal of a reliable, dependable and sufficient energy system. The provisions of the NEPP were largely integrated into the Electric Power Sector Reform Act No. 6 of 2005 (the “EPSRA”).

Despite the reforms and the privatization of the electric power sector, the average Nigeria does not that the sector has improved substantially. Specifically, much of the blame has been laid on the doorsteps of the electricity distribution companies (the Discos) and many people have claimed regulatory capture such that the Nigerian Electricity Regulatory Commission is believed not to be doing enough in terms of sanctions, as far as the Discos are concerned. This has led to the situation where there have now been calls for the State government to get more involved in regulating Disco and electricity distribution generally as some claim that federal regulation has failed.

Being a Constitutional matter and the Constitution being the supreme law of Nigeria, it is germane to review the Constitutional provisions around the powers of State Governments to make laws relating to electricity distribution.

The Fundamental Principles on Powers of the Federal and State Legislatures to Make Laws According to the Late Niki Tobi

JSC (as he then was), in the case of Attorney-general of Abia State v. Attorney-general of the Federation:

“The Constitution of a nation is the fons et origo, not only of the jurisprudence but also of the legal system of the nation. It is the beginning and the end of the legal system. In Greek language, it is the alpha and the omega. It is the barometer with which all statutes are measured. In line with the kingly position of the Constitution, all three arms of government are slaves of the constitution…in the sense of total obeisance and loyalty to it. This is in recognition of the supremacy of the constitution over every statute, be it an Act of the National Assembly or a House of Assembly of a State… All the arms of Government must dance to the music and chorus that the Constitution beats and sings, whether the melody sounds good or bad…..”

The principles of the law-making powers of both the federal and state governments are as spelt out in Section 4 of the Constitution. Specifically, Section 4 of the Constitution empowers the federal government to make laws:

- for the peace, order and good government of the Federation or any part thereof with respect to any matter included in the Exclusive Legislative List set out in Part I of the Second Schedule to this Constitution (and such items in the Exclusive Legislative List shall be to the exclusion of the State government by virtue of subsection 3 of the same Section).

- any matter in the Concurrent Legislative List set out in the first column of Part II of the Second Schedule to this Constitution to the extent prescribed in the second column opposite thereto

- any other matter with respect to which it is empowered to make laws in accordance with the provisions of this Constitution.

-

Adopting the Expressio Unis

Rule of Interpretation of Statutes (the express mention of an item excludes items not mentioned), it is safe to say that the foregoing represents the complete powers of the federal government to make laws and any law made outside of these limits are ultra vires the powers of the federal legislature.

In summary, the federal legislature can only validly make laws with respect to three areas as follows- (a) items in the Exclusive Legislative List, ( b) items the federal legislature is specifically empowered to make laws in the Concurrent Legislative List (emphasis on items the federal legislature is specifically empowered to make laws on) and (c) other matters the Constitution specifically empowers the federal legislature to make laws.

In light of the foregoing, it pertinent to mention that subsection (5) of the same Section 4 of the Constitution then states that “[I]f any Law enacted by the House of Assembly of a State is inconsistent with any law validly made by the National Assembly, the law made by the National Assembly shall prevail, and that other Law shall, to the extent of the inconsistency, be void.” It is germane to mention here, that the law of the State which will be void in the face of a federal law which is inconsistent will be a validly made federal law. Consequently, a law made by a State government which inconsistent with a an invalidly made law of the federal legislature cannot be invalid.

With respect of the fundamental principles around the legislative powers of the component States of Nigeria, Section 4( 7) stipulates that the House of Assembly of a State shall have power to make laws for the peace, order and good government of the State or any part thereof with respect to the following:

- any matter not included in the Exclusive Legislative List set out in Part I of the Second

Schedule to this Constitution.

- any matter included in the Concurrent Legislative List set out in the first column of Part II of the Second Schedule to this Constitution to the extent prescribed in the second column opposite thereto.

- any other matter with respect to which it is empowered to make laws in

- accordance with the provisions of this Constitution.

The deductions from the foregoing (and the analysis of powers of the federal legislature) is that States can make laws in connection with matters which are not in the Exclusive List, for which the federal legislature has not been empowered to make laws in the Concurrent Legislative List and or States are specifically empowered to make laws on, in other parts of the Constitution (but which are outside the Concurrent Legislative List).

Thus, where a State makes a law which is (a) not in the Exclusive Legislative List; and (b) is not specifically within the purview of the federal legislature in the Concurrent Legislative List, then that law is valid since it is not within the purview of the federal legislature as the federal legislative powers are clear, as adumbrated above. Conversely, the federal legislature cannot validly make laws on matters (a) outside the Exclusive Legislative List and (b) that it is not expressly empowered to make laws on under the Concurrent Legislative List or other provision of the Constitutions. Any such laws will be ultra vires its power and may be in place until validly challenged in court.

In the Supreme Court case of A.G. Federation v A.G. Lagos State (2013) 16 NWLR (Pt. 1380) page 249 SC, the Court held that “three Laws promulgated by Lagos State are not items in the Exclusive and Concurrent lists but are rather Residual matters for the State; hence, the laws enacted by the Lagos State Government are intra vires the powers of the State Government”. The purport of this is that an item the federal legislature is not empowered to legislate upon may only be validly legislated upon, by the State.

Having established the fundamental principles on the powers of each level of government to make law, it is vital to then review provisions of the Constitution on powers to make laws on electric power with emphasis on powers to make laws on electricity distribution.