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45% Electricity Tariff Hike Illegal – Federal High Court

by on July 14, 2016
 
Justice Mohammed Idris of the Federal High Court, Lagos, has voided the 45 percent upward review of electricity tariff by the Na­tional Electricity Regulatory Com­mission (NERC).
He said the entire process lead­ing to the new tariff regime was il­legal and directed that the National Electricity Regulatory Commission (NERC) and the Distribution Com­panies (DISCOs) should revert to the old rates.
The court also restrained NERC to stop from further increas­ing the tariff except it fully complies will the provisions of the Electric­ity Power Sector Reform Act 2004 (EPSRA).
In the landmark judgment, Justice Idris awarded a N50,000 cost against the defendants in favour of the plaintiff.
A lawyer and human rights activist, Mr. Toluwani Adebiyi, had filed the suit challenging the hike in electricity tariff by NERC and the industry operators.
On May 28, 2015, Justice Idris had directed NERC in an interim injunction to suspend all actions relating to any increment in elec­tricity tariff pending the determi­nation of the suit, but the commis­sion went ahead to hike the charges on July 1, 2015.
But in his judgement on Wednesday, the judge ruled that “the upward increment in tar­iff was hasty and procedurally ul­tra vires. The review was done in a breach of existing order. This again was hasty, reckless and irresponsi­ble. The court has the inherent ju­risdiction to undo what has been done by a party in self-help.
“The increment in tariff by the 1st defendant while parties are be­fore the court and there is a sub­sisting order for status quo is here­by declared illegal.
“The 1st defendant is hereby directed to reverse to status quo. The 1st defendant is further re­strained from increasing the elec­tricity tariff except in strict compli­ance with the provisions of EPSRA and the procedures stipulated in Section 76 of the EPSRA”.
The judge berated NERC for violating its powers by going ahead with the upward review without following due process.
He said: “The 1st defendant vi­olated its powers as contained in EPSRA. The law is clear and unam­biguous. The issue of increment in electricity tariff must comply with the provisions of Section 76 of EP­SRA. The 1st defendant has not shown that it acted in due obedi­ence to the prescribed procedures.
“There is no evidence that the 1st defendant complied with Sec­tion 76, (6), (7) and (9) of the EP­SRA. The 1st defendant did not give notice of the increase in of­ficial gazette and publish it in a newspaper with wide circulation or give room for the public to make presentations and objections be­fore the increase will be effected.
“Under the law, tariff incre­ment is subjected to a number of factors. Under the Act, custom­ers are to pay for only what they consumed. Of all the require­ments, the only one that appeared to have been complied by the 1st defendant is that it announced in the newspapers that it was going to increase the tariff. The recent in­crease in tariff is procedurally ultra vires. It is irregular. It is irrational and it is illegal,” Justice Idris added.
The judge also cautioned the investing public and admonished them to abide by the laws of the land. He said: “Let me say a word to the investing public. Investors are free to do business in Nige­ria but they should abide by the laws of this country. Nigeria is not a kangaroo state. Nigeria is not a banana country. So long as invest­ments are carried out within the ambits of the laws of this country, the courts have no business to in­tervene.”
The judge did not also spare the executive arm of government as he declared that, “it is intoler­able and extremely dangerous for it to embark on actions indicating that it may choose not to obey the orders of the courts.
“That is tantamount to exec­utive recklessness which may lead to lawlessness. Let me warn that no matter how high or low you may be, the law stands above you. Lawlessness, arbitrariness and ex­ecutive recklessness in exercise of powers conferred by law will nev­er be condoned,” Idris held.
The plaintiff, Adebiyi, in the substantive suit had sought for an order restraining NERC from im­plementing any upward review of electricity tariff without a signifi­cant improvement in power sup­ply.
Reps urge FG to halt planned 100% electricity tariff increase
And in its session yester­day, the House of Representatives urged the Federal Government to halt any plan to increase electrici­ty tariff by 100 percent.
The admonition followed a motion under matters of urgent public importance moved by Hon. Aliyu Madaki (APC-Kano).
Madaki said that the plan by the DISCOs to increase electricity tariff from N24 to N50 per kilowatt for residential consumers was not in the interest of Nigerians.
He expressed worry that the epileptic and erratic power sup­ply by the companies had persist­ed and stalled both households and commercial activities.
Madaki added that the planned new tariff will amount to disobedience of an injunction by the Federal High Court, Lagos, re­straining NERC from any increase in electricity tariff.
In his contribution, the House Majority Leader, Hon. Femi Gba­jabiamila (APC-Lagos), said there was a need to review the sale of DISCOs to private individuals.
Gbajabiamila added that the companies lacked financial and infrastructural capacity to deliver quality services to Nigerians.
In his ruling, the Speaker, Hon. Yakubu Dogara, referred the mat­ter to the ad-hoc committee to in­vestigate the sale of power assets.
The committee was also man­dated to investigate the rationale behind the last increase in electric­ity tariff by the DISCOs.

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