Updated: Court Declares Electricity Tariff Hike Illegal, Orders Govt To Revert To Old Rate

Court Declares Electricity Tariff Hike Illegal, Orders Govt To Revert To Old Rate

Justice Mohammed Idris of the Federal High Court in Lagos yesterday declared as illegal, null and void the recent hike of electricity tariff by the federal government through the Nigeria Electricity Regulatory Commission (NERC).

According to Justice Idris the increment is procedurally ultra vires, irrational, irregular and illegal.

While the judge ordered the government to revert to the old tariff with immediate effect, he also restrained it from further increasing electricity tariff except it comply strictly with the relevant provisions of the Electricity Power Sector Reform Act (EPSRA) 2005.

A Lagos lawyer, Toluwani Adebiyi had filed the suit in April 2015 seeking 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.

Justice Idris based on the application on May 28, 2015, directed NERC to suspend all actions relating to any increment in electricity tariff pending the hearing and final determination of a suit filed by the lawyer.

However, despite the subsisting court's order, NERC in conjunction with the Electricity Distribution Companies commence the implementation of the new electricity tariff on February 1, 2016.

The judge while delivering judgment on the suit on Wednesday, Justice Idris, whi cited Sections 31, 32 and 76 of the EPSRA 2005, held that, "NERC acted outside the powers conferred on it by the  Act and failed to follow the prescribed procedure.

The Judge further held 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 tarriff 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 at the Appeal.

"The tarriff 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.

"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 comply strictly with the relevant provisions of the EPSRA.

The sum of N50,000 was awarded in favour of the plaintiff," Justice Idris held.

Earlier the court had dismissed an application filed by NERC challenging its jurisdiction to hear the suit.  

The court formulated four issues for determination: 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".

On the issue of locus standi, the court held that, "the plaintiff is a Nigerian and a registered electricity consumer. There is no doubt that he pays electricity charges and is thus affected by the action of the defendants. The plaintiff, in my view, is entitled to approach the court to enforce the law in compliance with Sections 32 and 76 of the EPSRA Act. It is therefore my view that the plaintiff possess the relevant locus standi to institute this action.

On the third issue, the court  held that the action is not statute barred as it was timeously commenced.

On whether or not, a reasonable cause of action was disclosed by the plaintiff in the suit, the court held that, "having perused the affidavits filed by the plaintiff therein, the plaintiff has sets out the alleged wrongdoing of the defendants and the consequent damage. I therefore hold that the suit discloses a reasonable cause of action against the defendants.

Sequel to the above, the court held that it can validly exercise its jurisdiction over the matter.

Adebiyi, in the substantive suit, 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.

He also wants an order restraining NERC from foisting compulsory service charge on pre-paid meters not until "the meters are designed to read charges per second of consumption and not a flat rate of service not rendered or power not used."

He also wants the service charge on pre-paid meters not to be enforced until there is visible efficient and reliable power supply like those of foreign countries where the idea of service charge was borrowed.

Adebiyi, in the substantive suit, is seeking an order restraining NERC from foisting compulsory service charge on pre-paid meters not until "the meters are designed to read charges per second of consumption and not a flat rate of service not rendered or power not used."

The lawyer also wants the service charge on pre-paid meters not to be enforced until there is visible efficient and reliable power supply like those of foreign countries where the idea of service charge was borrowed.

He is further asking for an order of court mandating the NERC to do the needful and generate more power to meet the electricity use of Nigerians, adding that the needful should include and not limited to a multiple long-term financing approach, sourced from the banks, capital market, insurance and other sectors of finance to power the sector.

Adebiyi is asking the court to mandate the NERC to make available to all Nigerians within a reasonable time of maximum of two years, prepaid meters as way to stop the throat-cutting indiscriminate estimated bill and which must be devoid of the arbitrary service charge, but only chargeable on power consumed.

In an affidavit in support of the suit personally deposed to by the applicant, the lawyer lamented that despite the motto and mission of NERC which were expressly stated as "keeping the light on and to meet the needs of Nigeria for safe, adequate, reliable and affordable electricity," most communities in Nigeria do not get more than 30 minutes if electricity supply, while the remaining 23 hours and 30 minutes were always without light and in total darkness.

"Nigeria poor masses are paying an estimated and indiscriminate residential bills ranging from N5, 000 to N18, 000, spending an average of N15, 000 to N20, 000 for fuel to maintain generating set.

"Businesses have collapsed, industries have closed down, and residents cannot sleep comfortably at night due to inefficiency of our power industry".

"Companies and commercial Houses are groaning under throat-cutting power bill which they are paying for, yet not getting the benefit for such payment," Adebiyi stated.

He stressed that the proposed increase in electricity tariff was coming amidst the tangled web of poor power supply with no reasonable proof of improvement.

"The situation is self evident, it readily speaks for itself because everyone is suffering from poor power outrage.

"Bringing further increase amidst this tangled web of hardship and without any improvement in power supply, will be highly unjustifiable and will be an economic burden on Nigeria populace. It is totally absurd and not for the good of the people, and therefore must be stopped," Adebiyi submitted.