Court declares electricity tariff increment illegal

Justice Ibrahim Idris of the Federal High Court, Lagos has declared the upward review of electricity tariff by the National Electricity Regulation Commission (NERC) illegal and directed the reversal to status quo.

The judge also restrained the agency from further increasing the tariff except in strict compliance with the provisions of the Electricity Power Sector Reform Act 2004 (EPSRA).

In a landmark judgment, Justice Idris awarded a N50,000 cost against the defendants in favour of the plaintiff.
A lawyer and rights activist, Mr. Toluwani Adebiyi had filed the suit, challenging the hike in electricity tariff.

Justice Idris had on May 28, 2015, directed NERC in an interim injunction to suspend all actions relating to any increment in electricity tariff pending the determination of the suit, but the Commission went ahead and effected the review on July 1, 2015.

The judge held: “The upward increment in tariff was hasty and procedurally ultra vires. 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 increment in tariff by the 1st defendant while parties are before the court and there is a subsisting order for status quo is hereby declared illegal.

“The 1st defendant is hereby directed to reverse to status quo. The 1st defendant is further restrained from increasing the electricity tariff except in strict compliance with 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.

He said: “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 the 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.”

He added that there is affidavit evidence that the increment in tariff was done in defiance of a subsisting order of the Court which ordered parties in the case to maintain status quo ante bellum.

His words: “The 1st defendant was aware of the interim injunction of this court and still went ahead to ignore the directive and increase the tariff. 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 also cautioned the investing public and admonished them to abide by the laws of the land. He said: “Let me say a word to the investing public. Investors are free to do business in Nigeria but they shall abide by the laws of this country. Nigeria is not a kangaroo state. Nigeria is not a banana country. So long as investments are carried out within the ambits of the laws of this country, the court’s have no business to intervene.”

The judge did not spare the executive also. He reprimanded the executive and cautioned against recklessness. “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.

“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 an exercise of powers confer by law will never be condoned”, Idris held.

The plaintiff, Adebiyi, in the substantive suit, had sought for an order restraining NERC from implementing any upward review of electricity tariff without a significant improvement in power supply.

He also prayed for an order restraining NERC from foisting compulsory service charge on pre-paid meters, until the meters are designed to read charges per second of consumption‎.