Home Business Lagos Court halts NERC’s 45% electricity tariff increase

Lagos Court halts NERC’s 45% electricity tariff increase

by Business News Report

A Federal High Court in Lagos, has halt the electricity tariff increment announced by the Nigerian Electricity Regulatory Commission, NERC.

The judge, Justice Mohammed Idris in his judgment in the suit instituted by Mr. Toluwani Adebiyi a human right lawyer, challenging the increment, described NERC’s action as procedurally ultra vires, irrational, irregular and illegal.

In reaction, labour applauded the judgment and asked NERC and DISCOs to immediately respect the ruling, describing it as a “victory for the ordinary Nigerian who had been crushed by exploitative bills.”

These developments came on a day the House of Representatives described the Distributions Companies, DISCOs, as the biggest scam in Nigeria and called on the Federal Government to halt any plan to increase electricity tariff by 100 per cent in the country.
On the judgement,the court, relying on Sections 31, 32 and 76 of the Electricity Power Sector Reform Act(EPSRA) 2005, in deciding the substantive suit, held that, “NERC acted outside the powers conferred on it by the Act and failed to follow the prescribed procedure.”

The court said that “NERC has not shown that it acted in due obedience to the prescribed procedures and that there is no evidence that NERC complied with Section 76(6)(7)and (9) of the EPSRA Act.

“Of all the legal requirements, it appeared the only one complied with by NERC was that it announced the new tariff in the newspapers.

“It is clear from the affidavit evidence that the increase in tariff was done by NERC in defiance of the order of this court made on May 28, 2015, which directed parties in the case to maintain the status quo.

“The law is that every person upon whom an order is made by a court of competent jurisdiction must obey it, unless and until the order is discharged and set aside on appeal.”

The court consequently, held that,” The tariff increase from July 1, 2015 was done in breach of the ‘status quo’ order. NERC’s action, was therefore, clearly hasty, reckless and irresponsible.

“This country is in a democracy where the rule of law shall prevail over impunity or whimsical desires. Anything to the contrary will be an invitation to anarchy. It is the law that what is done officially must be done in accordance to the law.

”Investors are free to do business in Nigeria but they shall abide by the law of this country. Nigeria is not a kangaroo State. Nigeria is not a banana Republic. It is intolerance and extremely dangerous for any branch of the executive to create a posture it may not obey certain orders of the court. That is tantamount to executive recklessness which will lead to lawlessness.”

Invoking its disciplinary jurisdiction, the court ordered: “The increment in electricity tariff which took effect after the institution of this action and while a restraining order is subsisting is, hereby, declared illegal and same is hereby set aside.

“NERC is, hereby, directed to reverse to the status quo and the commission is, hereby, restrained from further increasing electricity tariff except it complies strictly with the relevant provisions of the EPSRA.”

The sum of N50,000 was awarded in favour of the plaintiff.

Labour hails ruling, says is a victory to Nigerian masses

Reacting to the judgement, organized labour applauded it and asked NERC and DISCOs to immediately respect the ruling and revert to the old tariff without further delay.

According to labour, the judgement is a “victory for the ordinary Nigerian who has been crushed by exploitative bills.”

Speaking through the chairman of Nigeria Labour Congress, NLC, Ayuba Wabba, Labour said: “We, at the Nigeria Labour Congress, wish to state that this is a courageous judgment deserving of commendation.

”We also consider it victory for the ordinary Nigerian who have been crushed by exploitative bills. We urge NERC and DISCOs to obey the judgment and revert to the old rates without further delay.

We demand that the NERC and DISCOs observe all the conditions precedent as contained in the sales agreement before any increase be made.”


Electricity tariff hike: DISCOs biggest scam in Nigeria—Reps
Meanwhile, the House of Representatives yesterday described the Distributions Companies, DISCOs as the biggest scam in Nigeria and called on the Federal Government to halt any plan to increase electricity tariff by 100 per cent in the country.
This is just as the Majority Leader in the House alleged that Electricity Distribution Companies didn’t have the financial capacity and technical know-how to handle distributions of electricity in the country.
The House in a resolution, after hearing a motion under matters of urgent public importance sponsored by Aliyu Madaki, representing Dala Federal Constituency of Kano State on the platform of the All Progressives Congress, APC, said that the plan by Discos to increase electricity tariff from N24 to N50 per kilowatt for residential consumers was not in the interest of Nigerians.
The lawmaker expressed worry that epileptic and erratic power supply by distribution companies had persisted and affected both households and commercial activities, adding that the planned new tariff would amount to disobedience of an injunction by the Federal High Court, Lagos that had restrained National Electricity Regulatory Commission, NERC, from any increase in electricity tariff.
He said: “I recall that in February 2016, NERC had increased electricity tariff by 45 per cent with no correspondent result as the electricity supply has dropped affecting both households and commercial activities.
“The planned 100 per cent increase in electricity tariff by NERC on the request of distribution companies is illegal and abuse of court process.
“If the proposed hike in electricity tariff is not put on halt, its multiplying effect on the economy and the social wellbeing of Nigeria cannot be quantified.”
Contributing to the debate, the House Majority Leader, Femi Gbajabiamila said there was need to review the sale of DISCOs to private individuals, noting that the companies lacked the financial and infrastructural capacity to deliver quality services to Nigerians.
He said: “The issue of DISCOs is the biggest scam; people are paying huge money and DISCO are smiling to the banks without commensurate services.
”In other countries, they do not privatize a large life wire of their economies. It is as if somebody powerful somewhere is protecting the DISCOs, so this House must remain resolute in finding out what gives the companies the effrontery to disobey resolutions and court orders.”
Speaker of the House, Yakubu Dogara, who presided over the plenary, told the Committee of Power to investigate the matter.
He also referred the matter to the ad hoc committee to investigate the sale of power assets and also investigate the rationale behind the last increase in electricity tariff by DISCOs which was not commensurate with their investment in the power sector

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