Court reverses 45 percent electricity tariff hike

Court reverses 45 percent electricity tariff hike
July 14 06:18 2016

A Federal High Court in Lagos, Wednesday, declared illegal the upward review of electricity tariff by the National Electricity Regulation Commission.

In a landmark judgment delivered by Justice Ibrahim Idris, the court ordered the reversal and restrained NERC from further increasing the tariff except in strict compliance to the provisions of the Electricity Power Sector Reform Act 2004 (EPSRA).

“The upward increment in tariff was hasty and procedurally ultra vires,” said Mr. Idris.

“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 judge’s decision came as the House of Representatives on the same day urged the federal government to halt any planned hike in electricity tariff in the country.

A lawyer and activist, Toluwani Adebiyi, had filed a suit seeking an order restraining the Federal Government from implementing any upward review of electricity tariff without a significant improvement in power supply across the country.

Last month, NERC told the Senate there was no going back on the 45 percent increase in electricity tariff already implemented across the country, adding that a reversal would worsen the power situation.

Minister of Power, Babatunde Fashola, who also appeared before the lawmakers, argued that NERC had the power to fix tariffs in line with the law passed by the National Assembly.

But in his judgment on Wednesday, Judge Idris said it was illegal for the increment to be enforced while parties were before the court and there was a subsisting order for status quo.

“The 1st defendant is hereby directed to reverse to status quo,” said the judge.

“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 judge berated the commission for violating its powers by going ahead with the upward review without following due process.

“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 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.”

In May 2015, the judge had granted an interim order restraining the NERC from implementing the upward review of the tariff; but the Commission went ahead to roll out its 45 percent tariff increase that became effective 1st July, 2015.

“The 1st defendant was aware of the interim injunction of this court and still went ahead to ignore the directive and increase the tariff,” Judge Idris said on Wednesday.

“There is no doubt that there is an appeal against the order of this Court. But the order of this Court has not been set aside and so remain valid and binding on all the parties.

“The law is that anybody to whom the order of court of competent jurisdiction is made must obey it, no matter how highly placed until it is discharged or set aside in appeal.

“The increment in tariff done by the 1st defendant with effect from 1st of July 2015 is an act done in breach of the status quo order. The action of the 1st defendant is therefore hasty, reckless and irresponsible.

“This country is in a democracy where the rule of law prevails over impunity or whimsical desires. Anything to the contrary is an invitation to anarchy. It is the law that what is done officially, must be done according to the Law.”

The judge reprimanded the Executive arm of government for disobeying the court’s order.

“It is intolerable and extremely dangerous for any branch of the executive to embark on actions indicating that it may choose not to obey the orders of the courts,” he said.

“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 confer by law will never be condoned,” the judge said.