Thursday, 14 July 2016

Court declares 45% electricity tariff hike illegal, reckless

Justice Mohammed Idris yesterday declared Court declares 45% electricity tariff hike illegal, reckless

Justice Mohammed Idris of a Federal High Court in Lagos yesterday declared illegal and ‘procedurally ultra vires, irrational, irregular’ the hike in electricity tariff announced in July 2015 by the Nigerian Electricity Regulatory Commission (NERC).
Besides, the court said the hike in the electricity tariff was not only procedurally defective and a breach of EPSRA 2005, but “clearly hasty, reckless and irresponsible.”

The Muhammadu Buhari administration had, last year, increased the electricity tariff in the country by 45 per cent. Minister of Power,Works and Housing, Mr. Babatunde Fashola, and the regulatory agency, NERC, had insisted that there was no going back on the tariff hike.

Justice Idris, while delivering judgement in a suit filed by a human rights lawyer, Mr. Toluwani Yemi Adebiyi, challenging the increment, described NERC’s action as completely a violation of an Act, which set up the agency.

Accordingly, the judge said NERC’s decision to increase the tariff was a flagrant violation of Sections 31, 32 and 76 of the Electricity Power Sector Reform Act (EPSRA) 2005 as it was not within the confine of its powers under the Act. He said: “NERC acted outside the powers conferred on it by the Act and failed to follow the prescribed procedure.

Tariff adjustment is a matter of law as enshrined in the EPSRA and it must follow the prescription as was set out in Section 76 of the EPSRA. “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. There is no evidence that notice of new tariff was given in the Gazette as prescribed by EPSRA. It follows, therefore, that the recent increase in electricity tariff is procedural ultra vires, irrational, irregular and illegal.

“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. “NERC, being aware of this order, turned a blind eye to it and proceeded to increase electricity tariff, as if the order never existed.There is no doubt that there was an appeal against this order, but it has not been set aside and so it remains binding on the parties.

“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 Court of Appeal. “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.” However, the court, while invoking its disciplinary jurisdiction, made the following orders: “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.Adebiyi, in the substantive suit, sought 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.

The Nigerian Labour Congress (NLC) has described the court’s ruling as a landmark judgement. NLC, in a statement issued in Abuja yesterday by its President, Comrade Ayuba Wabba, said the verdict was a courageous and judicial judgement deserving of commendation. Ayuba also said the judgement was a victory for the ordinary Nigerian who has been crushed by exploitative bills.

NLC, however, urged NERC and distribution companies (DISCOs) to obey the judgement 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.

“We recall that the joint stakeholders on increment on electricity tariff led by the NLC, in their communiqué issued in Lagos and dated January 29, 2016, had declared that the increase is illegal, unfair, unjustifiable and a further exploitation of the already exploited Nigerians,” it said