A lot of aggrieved Nigerian electricity consumers are uninformed about how to enforce their rights against Distribution Companies (DisCos) over tariff disputes, service quality complaints and other grievances, such that some usually file charges in court to seek redress. However, they are required under the law to exhaust regulatory dispute resolution mechanisms, as prescribed by the Electricity Act 2023, before pursuing legal action, AMEH OCHOJILA reports.

The Federal High Court in Lagos recently reinforced a key judicial precedent by ruling that consumers in Nigeria’s electricity sector must exhaust regulatory dispute resolution mechanisms as mandated by the Electricity Act 2023 before seeking legal action.

The decision, delivered on October 7, 2024, arose from a suit filed by the Manufacturers Association of Nigeria (MAN) against the Nigerian Electricity Regulatory Commission (NERC).

This case brings to light the importance of understanding the legal remedies available to electricity consumers and the need for Distribution Companies (DisCos) to adhere strictly to established procedures when addressing grievances related to tariffs, service quality, and other disputes.

MAN had challenged a tariff hike that increased electricity costs for Band A customers from N66 to N225 per kilowatt hour. The association contended that NERC failed to follow proper regulatory procedures for tariff reviews before issuing a supplementary order on April 3, 2024, and the revised tariff on May 6, 2024. MAN also argued that applying the increase solely to Band A consumers, while excluding other categories, amounted to discriminatory pricing.

NERC countered the claims by asserting that MAN had not followed the dispute resolution process outlined in the Electricity Act. The court upheld this position, dismissing MAN’s suit on the grounds that it failed to comply with Section 51 of the Act, which requires aggrieved parties to exhaust all internal mechanisms before resorting to litigation.

This ruling has drawn attention to the intricate legal framework governing Nigeria’s electricity sector and the challenges faced by consumers seeking redress.

The Electricity Act 2023 provides a structured process for resolving disputes. Section 51 explicitly outlines the scenarios under which consumers can challenge decisions, including disputes over licensing, tariffs, and service delivery. Before approaching the courts, consumers must first seek a review of decisions through NERC.

The Commission has 30 days to address such grievances. If dissatisfied, consumers may appeal to the Federal High Court, which has the authority to affirm, modify, or overturn NERC’s decisions.

This legal framework places significant emphasis on resolving disputes administratively before escalating them to the judiciary. This may also reflect the sector’s preference for regulatory intervention to streamline dispute resolution and reduce the burden on the courts.

However, customers complained that this process can be daunting for many, particularly with the current band classification. The band classification introduced by NERC, which segmented consumers into Bands A to E based on the average daily hours of electricity supply, has added to the complexities of Nigeria’s electricity landscape.

Band A consumers, who are promised 20 to 24 hours of electricity daily, are expected to receive the highest service priority but often report erratic supply and prolonged outages. This situation has led to widespread dissatisfaction and disputes over tariff fairness.

For instance, Oluwakemi Tykeemon, @tykeemon, a Band A consumer, publicly expressed frustration over being billed for premium service while receiving less than eight hours of electricity daily. She accused NERC of colluding with DisCos to exploit consumers.

Similarly, Akoje Ugeh, a civil servant in Abuja, lamented paying N5,000 for just 22.2 units of electricity, despite rarely enjoying up to 10 hours of supply daily. Such accounts highlight the gap between regulatory promises and the lived experiences of consumers.

The dissatisfaction is further compounded by allegations of malpractice among DisCo staff. Alleged complaints of inflated bills, non-reflection of payments, and manipulation of consumer classifications are rampant.

Victor Idajili, a landlord in Nasarawa state, alleged that postpaid customers are routinely overbilled due to deliberate tampering with meter readings by DisCo personnel.

He also claimed that attempts to obtain prepaid meters are often obstructed, leaving many consumers stuck on estimated billing systems and that when complaints are made to government agencies that are to regulate them, it hardly gets the desired attention.

However, despite these challenges, the Electricity Act 2023, alongside the Federal Competition and Consumer Protection Act (FCCPA) of 2018, offers consumers legal protection against service failures and billing disputes. NERC’s role in enforcing these laws is critical, as it is mandated to ensure that DisCos adhere to service standards and billing regulations.

But the Commission claimed it operates customer complaints forums nationwide, providing a platform for addressing grievances. These forums are designed to resolve disputes swiftly, reducing the need for prolonged litigation.

The claimed dispute resolution framework includes a quasi-judicial body known as the Forum, established under the Electric Power Sector Reform (EPSR) Act of 2005. The Forum’s composition ensures balanced representation, with members drawn from industry associations, consumer advocacy groups, and technical experts. This diverse representation aims to deliver fair outcomes in consumer complaints.

Section 47(1) of Nigeria’s Electricity Act 2023 empowers the NERC to conduct hearings upon receiving petitions from aggrieved individuals. This authority is exercised in accordance with Rule 14 of the NERC Business Rules 2006.

Rule 14 outlines the procedures for handling such petitions, ensuring that NERC’s quasi-judicial functions are carried out transparently and fairly. This framework provides a structured process for addressing disputes and grievances within the Nigerian electricity sector.

According to NERC, the Forum functions as an appeal body for consumers unsatisfied with the resolution of their complaints by their Distribution Company’s (DisCo) Customer Complaints Unit (CCU).

The Commission urges consumers to first lodge their complaints directly with their respective DisCo in writing. If the DisCo’s response is unsatisfactory or if there is a delay beyond the regulatory timeframe, consumers can escalate their complaints to the Forum, which provides a secondary platform for dispute resolution.

NERC said: “The Forum’s membership reflects a broad range of stakeholders, including: A representative for industrial customers nominated by the MAN. A representative for commercial customers selected by the Nigerian Association of Chambers of Commerce, Industry, Mining, and Agriculture.

“A household customer representative appointed by the Consumer Protection Council. A representative from a local non-governmental organisation (NGO) chosen by NERC. A nominee with an electrical engineering background, also selected by NERC, from within the DisCo’s operating area.”

Also the FCCPC plays a complementary role by investigating complaints and enforcing corrective measures against DisCos. The Commission has actively engaged in resolving consumer disputes through initiatives such as one-stop forums for addressing issues like overbilling, transformer shortages, and disconnections. Consumers who have utilised these platforms have reported some successes, but limitations persist in the form of weak enforcement mechanisms and bureaucratic delays.

The FCCPC has advised distribution companies to design a quick response mechanism in addressing customers’ complaints within their networks.

According to FCCPC, the major complaints received from all over the country are over billing, community transformer problems, disregard of metering and regulations from NERC with respect to disconnection, energy tapping, and tariff band classification.

The limitations of the regulators, according to the industry experts, range from weak penalties to poor bureaucracy in implementation and intervention.

They argued that if administrative avenues do not resolve the dispute, consumers can pursue legal action against DisCos for breach of contract or negligence.

Where regulatory remedies fail, consumers have the option to pursue alternative dispute resolution (ADR) methods, including mediation and arbitration. These approaches are often faster and less confrontational than litigation, offering a practical path to resolving disputes.

However, when all else fail, consumers can take legal action against DisCos, provided they have exhausted all administrative avenues as required by law. The courts have the power to award damages and compel DisCos to meet their contractual obligations, but such outcomes depend on consumers following due process.

The Electricity Act 2023 offers a comprehensive framework for resolving disputes and ensuring consumer protection. However, its success depends on the active participation of consumers in utilising available remedies and the willingness of regulators and DisCos to act in good faith.

As frustrations mount, the sector must rise to the challenge of delivering reliable electricity services that justify the high tariffs paid by consumers. Only through sustained efforts to improve transparency, enforce compliance, and address systemic issues can the electricity sector regain public trust and fulfill its mandate of equitable service delivery.