Electricity Tariff: NERC Appeals Judgment of Lagos Court

NERCThe Nigerian Electricity Regulatory Commission (NERC) has appealed against the judgement of a Federal High Court sitting in Lagos which declared as illegal the electricity tariff currently used in Nigeria by the 11 electricity distribution companies.

Acting Executive Secretary of the commission, Anthony Akan, described the ruling as a major setback on the progress made in the country’s electricity sector.

He added that while the commission respects the decision of the court, it would appeal the judgement because it represents a reversal of the commercial foundation on which power supply contracts in the sector were built.

Mr Akah said that the commission was dissatisfied with the judgement because it impinges on the ultimate destination of the power sector as a commercialized electricity market.

He explained, “The ultimate destination of a commercialized electricity market is to achieve stability and adequacy in the supply of electricity to satisfy the yearning of Nigerians for adequate, safe and reliable electricity supply.”

According to him, the multi-year tariff order which the judgement effected provides a long term path of determining in advance, what the tariff will look like and based on that a lot of improvement in the sector were recorded and are in progress.

The Judgment

Justice Mohammed Idris, who delivered judgment in a suit filed by a Lagos based lawyer, Mr. Toluwani Adebiyi, challenging the increment, described NERC’s action as irrational, irregular and illegal.

The court, while 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 was also of the view 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.

The court further held that “of all the legal requirements, it appeared the only one complied with by NERC was that it announced the new tariff in the newspapers.

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

On this issue, the court said, “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 at the Appeal.

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

Speaking further, Justice Idris said, “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 with 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”, he said.

In view of these, the court while invoking its disciplinary jurisdiction, ordered that “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 court said.

The sum of 50,000 Naira was awarded in favour of the plaintiff.

Court Orders NERC To Reverse Increase In Electricity Tariff

Jimoh Ibrahim, NICON, Global FleetThe Federal High Court sitting in Lagos has annulled the increment in electricity tariff recently announced by the Nigerian Electricity Regulatory Commission (NERC).

Justice Mohammed Idris, who delivered judgment in a suit filed by a Lagos based lawyer, Mr. Toluwani Adebiyi, challenging the increment, described NERC’s action as irrational, irregular and illegal.

The court, while 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 was also of the view 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.

The court further held that “of all the legal requirements, it appeared the only one complied with by NERC was that it announced the new tariff in the newspapers.

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

On this issue, the court said, “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 at the Appeal.

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

Speaking further, Justice Idris said, “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 with 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”, he said.

In view of these, the court while invoking its disciplinary jurisdiction, ordered that “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 court said.

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

The court had earlier held that it indeed has the jurisdiction to entertain the matter.

In deciding on the issue of jurisdiction, the court made explanations on four issues: These are: whether or not the suit was properly commenced; whether or not the plaintiff has ‘locus standi’ to file the action; whether or not the suit was statute barred and whether or not the suit disclosed a reasonable cause of action.

On the first issue, the court held that the suit was properly commenced by originating summons.

“Having looked at the affidavit evidence, it is my view that there are no substantial disputes of facts on the materials needed for the determination of this suit. I therefore hold that this suit is properly commenced by an originating summons. The originating summons filed by the plaintiff contains the questions for determination and the reliefs sought from the court in compliance with the rules of the court”.

NERC Set To Investigate Electrocution Of Abuja Residents

Electricity, renewable energyThe Nigerian Electricity Regulatory Commission (NERC) says it is commencing an investigation to unravel the causes behind the electrocution of six residents of Tudun – Wada village, a suburb of the Federal Capital Territory, Abuja.

The Acting Director General of the Commission, Mr Anthony Akah, told journalists after visiting the site of the incident that the panel of enquiry will investigate the exact numbers of casualties as well as the role or otherwise of the distribution company.

He also assured victims that government will take responsibility for the cost of their treatments.

Last week Saturday was no doubt a black Saturday for families, who lost their loved ones to the incident.

Residents say six deaths and about 40 persons, including children, were injured when the accident happened.

New Electricity Tariff: Court Dismisses Application To Stay Proceedings

Rickey TarfaA Federal High Court sitting in Lagos has thrown out a suit over the hike in electricity tariff, for lack of merit.

Justice Mohammed Idris held that contrary to the claims of the Nigerian Electricity Regulatory Commission (NERC), there is no indication that an appeal has been listed for hearing at the Appeal Court.

The NERC had asked the court to stay proceedings until its appeal against two previous rulings are heard and determined by the Appeal Court.

The application was dismissed and a cost of ten thousand Naira was awarded in favour of the plaintiff, a Lagos based lawyer, Toluwani Yemi-Adebiyi.

The Federal High Court sitting in Lagos on February 15, 2016 warned the Federal Government and the Distribution Companies (DISCOs) not to disobey subsisting court orders on electricity tariff.

The court also warned the government not to act in a way that showed disdain for the court in a constitutional democracy.

Presiding Justice, Mohammed Idris, gave the warning while ruling in a suit filed by a lawyer and rights activist, Toluwani Adebiyi, over the recent hike in electricity tariff on Monday.

Electricity Tariff: Court Dismisses NERC’s Stay Of Proceedings

NERCThe Federal High Court sitting in Lagos has dismissed an application seeking to stay proceedings in a suit over the hike in electricity tariff.

The application was dismissed for lack of merit and a cost of 10,000 Naira was awarded in favour of the plaintiff who is a Lagos based lawyer, Toluwani Yemi-Adebiyi.

While dismissing the application which was filed by the Nigerian Electricity Regulatory Commission (NERC), Justice Mohammed Idris held that contrary to the claims of the commission, there was no indication that an appeal had been listed for hearing at the Appeal Court.

The NERC had in the application, asked the court to stay proceedings until its appeal against two previous rulings delivered by the judge was heard and determined by the Appeal Court.

In the two previous rulings, Justice Idris had barred NERC from implementing any upward review in electricity tariff pending the hearing and determination of the suit.

The plaintiff also urged the court to dismiss all objections to the contempt charge and commit the NERC Chairman and the CEOs of the Electricity Distribution Companies (DISCOs) to prison for desecrating the judiciary.

After listening to the arguments of parties, Justice Idris adjourned till February 29 for ruling on the application challenging the contempt charge.

In the substantive suit however, the plaintiff is seeking an order restraining NERC from implementing any upward review of electricity tariff without a meaningful and significant improvement in power supply at least for 18 hours in a day in most communities in Nigeria.

NERC Blames Poor management For Lack Of Sustainable Electricity

NERCThe Chairman of the Nigerian Electricity Regulatory Commission (NERC), Dr. Sam Amadi, on Tuesday blamed poor project management for the inability of the sector to generate and guarantee sustainable electricity.

He said this at a meeting between the commission and performance management officers of generation companies in the country.

Dr Amadi said the sector needs to develop skills that will enable it project and deliver on needed targets.

He also reminded the industry performance management officers that they have signed up to a capacity improvement agreement, adding that “we will monitor and our monitoring is not to penalise, it is to help us to learn more so the industry can improve.

“Now that utilities are private sector based, we have been able to resolve the remodelling issue, thus focus on project management”, he said, expressing hope that the country can end the year with at least 6, 000 megawatts.

Pipeline Vandalism Is Political, NERC Chairman Alleges

gas-pipeline-vandalisationThe Chairman of the Nigerian Electricity Regulatory Commission (NERC), Dr Sam Amadi, on Thursday said pipeline vandalism in the country may be political as there is no economic value derived from the action.

Dr Amadi made the allegation at the continuation of the Nigerian Political Parties discussion series in Abuja.

However, the Spokesman of the All Progressives Congress (APC), Mr Lai Mohammed, accused the PDP administration of playing politics with the issue of vandalism of pipelines by giving contracts for the surveillance of pipelines to Niger Delta militants.

The meeting was one of the few occasions in the run up to the 2015 general elections where a representative of the federal government and the opposition party share a platform to discuss issues affecting the country.

This time the discussion centered on the persistent irregular supply of electricity in Nigeria.

Dr Amadi said the present administration’s power sector reform is creating an enabling environment for sustainable investment that would result in an improvement both in quantity and reliability of electricity supply.

But Mr Mohammed said the privatisation of the power sector, which, according to him, was supposed to be a solution to the problem of irregular electricity supply, has failed woefully.

Both sides, however, agreed that vandalism of the gas pipelines have contributed to the irregular electricity supply situation in the country and spoke about how their parties intend to address this challenge.

However a public analyst, Dr Okey Ikechukwu, who was on the panel, said the electricity situation in the country is set to improve in the coming months.

Dr Amadi also assured that the regulatory commission would continue to be transparent in its actions and work towards the creation of an enabling environment for sustainable investment in the power sector.

FG Slashes Electricity Tariff By 50 Per cent

NERCThe Nigerian Electricity Regulatory Commission (NERC) has announced the immediate review of electricity tariffs by about 50 per cent.

The Chairman of the Commission, Dr. Sam Amadi, said the reduction, which takes effect from the end of March, follows the regulatory agency’s decision to remove collection losses from customer tariff under the multi-year tariff order.

“It is clear that removing the collection losses will lead to lower tariffs for consumers. The removal of collection losses from customer tariff has reduced tariff by more than 50 per cent in some places. Please note that the reduction does not affect the CBN facility and its repayment.

“Industrial and commercial consumers under the auspices of the Manufacturers Association of Nigeria (MAN) petitioned the commission, asking for a review of the MYTO 2.1 and requested drastic reduction of their tariff. They claimed that such astronomical increase in tariff would kill their business and lead to massive job losses.”, he said

Amadi argued that the Electric Power Sector Reform (EPSR) Act and the Business Rules of the Commission mandated the commission to review its decision.

He further noted that this new direction comes as part of the commencement of the Transitional Electricity Market (TEM). The TEM is built on bilateral trading between parties and is geared towards ensuring an efficient market where cost reflectivity will lead to more affordable electric services for consumers.

He said the new order now amended the MYTO 2.1 and had reduced the tariff to be paid by all class of consumers.

In the review of MYTO 2.1, he said the commission followed due process and the regulatory principles.
“NERC remains committed to the principle of cost-reflective pricing and to the development of an efficient and financially viable electricity market. These are important to support the investment that is needed to ensure the electricity supply industry meets the needs of the Nigerian economy.

“The decision to review tariff is completely compatible with the terms of the privatisation and has been reviewed with the Bureau for Public Enterprises (BPE). NERC and BPE are working together to advocate for series of fiscal policies that will foster easier access to investible capital to further increase capacity and enhance reliability in the sector,” it concluded.

The Commission further adds that from its consultation with various electricity consumer groups across the country, it established that the skyrocketing increase in the tariff was informed by huge aggregate technical, commercial and collection losses which are incurred by the electricity Distribution Companies (DISCOs) and are subsequently passed on to consumers.

NERC Extends Residential Tariff Increase Till June

Sam_Amadi_NERDC
Chairman, Nigerian Electricity Regulatory Commission (NERC), Dr Sam Amadi.

The Nigerian Electricity Regulatory Commission (NERC) has extended increase in tariff for residential consumers to June 2015 while charges for other classes of consumers took effect from January 1, 2015.

Addressing a news conference in Abuja, Chairman of NERC, Dr Sam Amadi, said that the freeze in charges for residential consumers who constitute about 80 per cent of the electricity consumers is aimed at promoting the interest of consumers as well as stimulate operators to serve consumers better.

Dr Amadi also expressed worries over the rate of meter deployment by electricity distribution companies in spite of the credited advancement payment initiatives.

I Sympathise With Power Sector Pessimists – Dikki

The Director General of the Bureau of Public Enterprises (BPE), Benjamin Dikki, has expressed confidence that the handover of Nigeria’s power sector to investors will yield desired results, but extended his sympathy to those who do not believe so.

“I sympathise with those who are pessimistic. All I can tell them is: just wait and see what’s going to happen.”

Mr Dikki who was speaking on Sunrise Daily, from our Abuja studio described the handover as “a historic process.”

Making an example of the privatised Telecoms sector, he stated that the progress witnessed in that sector will pave way for Nigerians to appreciate the handover of PHCN to private investors.

“We have to look at what has happened via the reform of the telecom sector for us to appreciate the magnitude of what is happening and what will happen in the power sector,” he said, “once you hand over a sector to the private sector and create an enabling environment, you would see a revolution in that sector.”

“We are looking out for a revolution in the power sector,” he said.

Speaking about the defunct PHCN, Mr Dikki explained that the separation of power generation from power distribution would correct the inconsistencies which marred the former system, that amounted to loss of revenue and power.

The power generating companies will sell to the distribution companies who will in turn sell to the end users.

“This has introduced transparency in the power value chain. Revenues that are expected to be collected will be collected because this is now business” and those who invested, expect to make returns, Mr Dikki stated.

The handover will also unburden the Federal Government of any financial obligations as the private investors are expected to pump in funds in order to meet up with the demand for electricity.

“Government is now being free from the responsibility of financing and budgeting for the 14 companies handed over to private investors.”

He countered arguments that the total privatization of the power sector would pose security issues stating that similar things were said when the telecoms sector was to be privatized.

However, he assured that “government is not going to go out of power immediately” and the “proceeds from the NIPP plant (National Independent Power Project) will be ploughed back into other sources of energy: hydro, renewable energy and solar.”

An independent regulatory agency, Nigerian Electricity regulatory Commission (NERC) which he described as the ‘policeman of the sector’ will ensure that the investors follow the laid down guidelines and tariff structure.

I can fish out subsidy ‘thieves’ in one week — Ribadu

Former Chairman of the Economic and Financial Crimes Commission (EFCC), Nuhu Ribadu, on Tuesday said it would take him just a week to fish out the “thieves” in the House of Representatives subsidy probe report if given the mandate by the Federal Government.

Mr Ribadu stated this at an interactive session with the management and staff of Nigerian Electricity Regulatory Commission (NERC) in Abuja.

“If I were to work on this subsidy, I would just arrest PPPRA officials, and through them I would bring out every single person who took one penny from government. I would get all of them because it is the gatekeeper that has failed so I would not bother myself with anybody else. No one can take money for product he did not supply except if PPPRA allows it,” he said.

Mr Ribadu said public servants benefit more than the oil marketers from the corruption circle in the subsidy regime.
“For every one person outside of government that benefits in this subsidy scam, public servants benefit three times,” he said.

According to him, all the regulatory failures in Nigeria were due to the bad and docile leadership.

The former EFCC helmsman called on the Federal Government to reform the Nigeria Police Force to enable it  tackle corruption and insecurity in the country.

“We have destroyed and weakened an institution that is constitutionally assigned the responsibility to enforce law and order internally in this country,’’ Mr Ribadu said, noting that military personnel discharged internal security duties contrary to the provisions in the constitution.

The former presidential candidate of the Action Congress of Nigeria, who is the Chairman, Special Task Force on Petroleum Revenue, urged the Federal Government to train and retrain the police to enable them to tackle corruption and insecurity in the country.

NERC to hike electricity tariffs in June

The much anticipated hike in electricity tariffs will become effective from the 1st of June this year.

The chairman of the Nigerian Electricity Regulatory Commission (NERC) Dr Sam Amadi made this known to  journalists in Abuja on Friday.

Dr Amadi noted that the new tariffs have been worked out in a manner that Nigerians-especially those in rural areas-will not be over-burdened.

He also gave the assurance that the increase will come with improved service delivery.

According to Dr Amadi, “the new tariffs that we are expecting is predicated on service delivery and so we are already moving in that direction to ensure that by June, when the new tariff shall come into effect, there will be massive improvement in service delivery as we also hope the quantity of power will have also increased.”

“Just like we removed the meter maintenance fee, we are committed that the new tariff will come in a regime that there is more transparency and more accountability” he added.
He also hinted that there will be improvement in metering and billing saying, “we are going to ensure that the ‘crazy billing’ is not going to happen.”
He acknowledged that there has been many years of poor and no investment in the sector, adding that we cannot continue like this “and that is why the new tariff will come into effect in June with improved services.”

The planned price hike is part of measures taken by the federal government in its reform of the power sector to make it profitable for investors.

However the exact tariffs and conditions are yet to be made public.

Dr Amadi also announced that the dispute between the residents of the Victoria Garden City (VGC) in Lagos and the Eko distribution company has been resolved with the company refunding N8 million to the residents for wrong billing.