Power Firms Appeal Court’s Reversal Of Tariff Hike | Independent Newspapers Limited
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Power Firms Appeal Court’s Reversal Of Tariff Hike

Posted: Jul 15, 2016 at 4:31 am   /   by   /   comments (0)

Charles Okonji


Lagos – Mr. Sunday Oduntan, Executive Director, Association of Nigerian Electricity Distributors (ANED), on Thursday informed that ANED would appeal against the judgment of the Federal High Court, which annulled the recent 45 percent increment of electricity tariff.

This is coming as the Acting Chairman of Nigerian Electricity Regulatory Commission (NERC), Dr Anthony Akah, while also reacting to the Federal High Court’s judgment, insisted that electricity distribution companies must be protected from running loss.

Oduntan pointed out that ANED, which comprised the 11 Electricity Distribution Companies (DISCOs) operating in Nigeria, had the legal right to appeal the judgment, disclosing that during the course of the case at the Federal High Court, the association applied to be joined, as an interested party, and it was joined in the suit.

He said: “We have the right of appeal and we are going to appeal. We will ask for a stay of execution now. I can assure you that as a legal luminary, we will not stop until we get justice. If the Appeal Court judgment is not favourable, we will pursue the case to the Supreme Court, which is the highest court in the land. So, there is no cause for alarm.”

Justice Mohammed Idris of the Federal High Court in Lagos, while delivering judgment in a suit filed by a human rights lawyer, Mr. Toluwani Adebiyi, who challenged the increase in the electricity tariff, annulled the increment that was announced by NERC.

The judge described NERC’s action as ultra vires, irrational, irregular and illegal, stating: “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 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 of the provisions EPSRA and the procedures stipulated in section 76 of the EPSRA. N50,000 cost is awarded against the defendants in favour of the plaintiff. That is the judgment of the court.”

The acting chairman of NERC, in a telephone interview with Independent, disclosed that NERC, at the moment, would respect the decision of the court, but added that the legal team of the apex regulatory body of the power sector would study the judgment and advise NERC on the next line of action.

Akah stated: “Our lawyers will study the judgment and advise us on what next to do, but at the moment, we have to obey the court’s judgment. But I must say that the distribution companies must be protected against loss because at the moment their revenue profile is below cost of their services.

“No reasonable company, you must know, will like to operate below cost of production. We know the challenges they are facing and that is why we, the regulatory body, are coming out with strategies on how to help them out.

“Already, we have given them November 30, 2016 as the deadline to meter everybody. Still, we have told consumers that if the distribution companies give them estimated bill, which they know it is not what they consumed, they should reject it.

“Our duty is to protect the consumers as well as the companies because no investor will like to run into loss. When you are running below the cost of production, nobody will advise you to adopt a strategy that will help you to readdress the situation. The electricity distribution companies are facing some challenges and we need to face the reality,” NERC boss stressed.

However, the Minister of Power, Works and Housing, Mr. Babatunde Fashola (SAN), who had earlier argued, when he appeared before the National Assembly, that NERC had the power to fix tariffs in line with the law, on Thursday, gave three conditions on how to achieve uninterrupted power supply in the country.

Fashola, who stated this at the end of the second edition of National Council on Power, said until Nigerians stopped vandalism of pipelines and Nigerians contractors, who are awarded contracts to build distribution access, built it properly, the nation would not attain stable electricity supply.

The third condition, according to him, was when communities, who host these assets, also understand that they must sacrifice to ensure that the nation could benefit from those assets.