Manufacturers lose case against power tariff hike

A Federal High Court in Lagos has struck out a case by the Manufacturers Association of Nigeria challenging the implementation of electricity tariff review by the Abuja Electricity Distribution Company Plc and 11 others.

The Nigerian Electricity Regulatory Commission disclosed this in a statement posted on its official X handle on Thursday.

The recent development represents a significant setback in the manufacturers’ efforts to reverse the electricity tariff to its previous price.

MAN had labelled the hike in power tariff as detrimental to economic growth and the overall stability of the market.

It challenged the review of the electricity tariff by the Nigerian Electricity Regulatory Commission and filed a lawsuit at the Lagos Judicial Division of the Federal High Court.

The power sector regulator in its supplementary Multi-Year Tariff Order of April 3, 2024, noted that after considering the macroeconomic environment, it found it necessary to approve an increase in tariff for Band ‘A’ to N225/kWh. It later reduced the rate to N206/kWh.

The statement read in part, “A Federal High Court sitting in Lagos has struck out a case by the Manufacturers Association of Nigeria challenging the implementation of electricity tariff review by the Abuja Electricity Distribution Company Plc and 11 others.”

In the judgment on October 7, 2024, the court considered all the parties’ arguments and ruled that MAN’s suit was an abuse of court process being premature and without due regard to the provisions of section 51 of the Electricity Act 2023.

The court also held that MAN’s case disclosed no reasonable cause of action as it had not exhausted the dispute resolution mechanism.

It thus held that the suit was not instituted with due process of law and consequently struck out the case.

In the suit seeking a reversal, MAN sought four reliefs: that due process stated in the Act for the review was not fulfilled before AEDC and the others applied to NERC for the tariff review on 31 July 2023.

It also stated that regulatory requirements for tariff reviews were not followed before NERC issued the Supplementary Order of April 3, 2024, and the subsequently reviewed rate of 6 May 2024.

MAN also held that placing the burden of the tariff increase on only Band “A” feeders and leaving out other bands amounted to discrimination against such consumers.

It then noted that the defendants must comply with administrative procedures for tariff review before rightfully implementing the April and May Supplementary Orders.

But the commission objected to the plea, stressing that the case was an abuse of court processes.

It characterised the filing as hasty and prematurely submitted, arguing that it did not adhere to the established legal procedures.

“NERC had objected to the suit stating that MAN’s case constitutes an abuse of court processes, being hasty and prematurely filed without following due process of the law,” the commission stated.