Tariff Judgement, A Reversal od Commercial FoundationofPowerContracts,SaysNERC

  • Gas, hydro, coal, and solar feedstock for production of electricity affected, to appeal ruling

By Chineme Okafor in Abuja

The Nigerian Electricity Regula- tory Commission (NERC) yesterday said it had appealed the judgement of a Federal High Court in Lagos which early this week declared as illegal, the

electricity tariff currently in use in Nigeria by the 11 electricity distribution companies (Discos), describing it as a major setback on the progress made in the country’s electricity sector.

NERC’s acting Head, Dr. Anthony Akah told journalists at a briefing in Abuja yesterday that while the commission re- spects the decision of the court, it would appeal the judgement because it represented a reversal of the commercial foundation on which power supply contracts in the sectorwere built.

Akah said the commission was dissatisfied with the judge- ment because it impinges on the ultimate destination of the power sector as a com- mercialised electricity market.

He said: “It represents the

reversal of the commercial foun- dation upon which contracts for gas, hydro, coal, and solar feedstock for the production of electricity have been predicated.

“The ultimate destination of a commercialised 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.

“This judgement in our view is a setback to the progress made so far in the electric

ity sector. Therefore, we will challenge this decision. We have instructed our lawyer to appeal. Consequently, the commission has filed for stay of execution and a notice of appeal of the judgement yesterday (Thursday).

“We understand that private power production and distribu- tion is relatively new in Nigeria and that development such as this court ruling must be seen in that context as the laws begin to face judicial tests of interpretations.

“We believe that ultimately, everybody and all institutions will come to better understand- ing of the values of the choice we have made as a nation to privatise the power sector.”

Akah urged the investors and consumers to remain calm, as a solution to the ruling was being sought after.

He also disclosed that the commission had not received the full report of the judgment almost 48 hour after the court ruling.

When asked why it had taken it this long to obtain; study the ruling; and make informed appeal especially as

regards which of the tariffs the court has set aside its operation, Akah said: “The commission has not received the full report of that judgment, we have already directed our lawyer to get a certified true copy; we are going to study that full judgement and based on the interpretation contained therein, we will be able to answer which of the tariff the honourable justice referred to but at this point in time, we don’t know which of the tariff he was referring to.

“But the fundamental point is that, as a responsible institution, we respect the judgement of the court. What is fundamental is that we have filed for stay of execution and notice of appeal in line with the law.

“You don’t get copies over the counter in courts and as much as possible, you try to get the certified true copies of the judgement to be able to make informed decision.”

Asked to explain in specifics what impacts the judgement has on NERC’s regulatory responsibilities and the sec- tor’s operations, Akah stated: “The electricity sector is very expensive long term business endeavour and there is what is called regulatory certainty in the regulatory parlance.

“The multi-year tariff order which the judgement affected 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.

“Just as the minister had announced, licences are to be issued for 1000 megawatts (MW) solar power capacity plant and the licenses and transactions involved were predicated on the multi-year tariff order of 2015. The various investors that intend to come into the sector also predicated their investments on the basis of this.”

The Lagos court had on July 13, annulled the recent increase in electricity tariff announced by NERC.

Justice Mohammed Idris made the pronouncement while delivering judgment in a suit filed by a human rights lawyer, Mr. Toluwani Adebiyi, challenging the increment. The judge described NERC’s action as being ultra vires, irrational, irregular and illegal.