Electricity: Court decision throws tariff regime into confusion

NERC

*NERC.

…As NERC rejects ruling, to continue implementation of new tariffs

Oscarline Onwuemenyi

16 July 2016, Sweetcrude, Abuja – Widespread confusion and concern reigned in the nation’s power sector following Wednesday’s decision by a Federal High Court which ordered the reversal of a six-month old tariff increase in the sector.

The Nigerian Electricity Regulatory Commission (NERC), yesterday, rejected the order of the Federal High Court in Lagos, declaring the February 1 electricity tariff raise illegal.

Justice Mohammed Idris had on Wednesday ordered the Commission to immediately reverse the decision as the process that led to the new tariff regime did not follow due process.

But, Acting Chairman of the commission, Dr. Anthony Akah, said in Abuja on Friday that although the regulatory agency respected the decision of the court, it was dissatisfied with it.

He said the ruling represented the reversal of the commercial foundation upon which contracts for gas, hydro, coal and solar feedstock for the production of electricity were based.

“This judgment, in our view, is a major setback to the progress made so far in the electricity sector,” Mr Akah said. “Therefore, we will challenge the decision.”

He said the commission had already instructed its lawyers to file for a stay of execution of the order, while a notice of appeal of the judgment has been issued.

A Federal High Court in Ikoyi, Lagos had on Wednesday reversed the 45 per cent increase in electricity tariffs by NERC and the Federal Government in a landmark judgment.

Justice Mohammed Idris made the pronouncement while delivering judgment in a suit filed by a human rights lawyer, Toluwani Adebiyi, challenging the increment.

The court declared that the increase was illegal and ordered that it should be reversed immediately. The court also held that the implementation of the tariff hike constituted a violation of its interim order, and awarded N50,000 cost against the Nigerian Electricity Regulatory Commission (NERC).

The judge described NERC’s action as “ultra vires, irrational, irregular and illegal.”

Before yesterday’s decision, NERC on Thursday had said it would uphold the court ruling mandating it to reverse the 45 per cent increase in electricity tariffs across the country, six months after implementing the Multi Year Tariff Order 2, which brought about the hike in the tariffs.

But the Association of Nigerian Electricity Distributors (ANED), the umbrella body for the 11 distribution companies operating in the country, said nothing has changed and that they would continue to implement the 45 percent hike in tariffs.

ANED also said that it has appealed against the Federal High Court ruling and filed for a stay of execution.

The Executive Director of ANED Sunday Oduntan, who announced the decision in a telephone interview with our correspondent noted that the association had appealed against the ruling and would pursue the judgment to the Supreme Court for justice to be done.

Akah had told our correspondent that after consulting with his legal department, the commission resolved to comply fully with the judgment before considering any other option if necessary.

He said, “We have not obtained the full court ruling so that we can study it and, of course, respect the decisions of the court and evaluate any other option, if necessary. But of course, we have strong respect for the judiciary and we will definitely comply with the ruling before considering any other option that we may decide on.

“However, I want you to know that our lawyers have not got the full copy of the ruling and we have not studied its contents, because anybody can be speculative. There are different speculations and I don’t know if anybody has seen the detailed contents of the ruling in order to evaluate and interpret.

“But that notwithstanding, NERC as a responsible institution, will and must respect the decision of the court and we are going to respect the order by the judiciary. We will also consider the advice of our legal department for any other option if necessary.”

Oduntan, on his own part, insisted that that the case was only lost at the Federal High Court.

He said the Discos had appealed the ruling and were prepared to pursue the case up to the Supreme Court if need be, adding that nothing had changed as the power firms would still go ahead to collect what they used to charge as electricity tariff.

Oduntan said, “In that case and at that level, we lost the case but we are appealing, and we have filed for a stay of execution, which means everything remains the same. We respect the court and as a lawyer, I’m a counsel in the temple of justice and respect any ruling given by any court of competent jurisdiction.

“So, we have no problem with the ruling but we are appealing it; because at that level, it is not final. For that reason, we are going on with our business without any distraction and we will continue to fight the case up all the way to the Supreme Court if need be. Therefore, in essence, nothing has changed.”

In the meantime, the Nigerian Labour Congress lauded the court judgment, describing it as a courageous one and added that it was in the interest of the people and was a victory for Nigerians against arbitrariness in governance.

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