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Monday, 13 June 2016

GENCOs ask court to stop NERC ‎from reviewing electricity tarriffs




Some electricity generating companies have sued  the National Electricity Regulatory Commissio‎n before a Federal High Court in Abuja, asking the court to stop the commission from ‎reviewing the tariffs being charged by them.
The group of plaintiffs are Egbin Power Plc, Geregu Power Plc, Transcorp Power Ltd, Kainji Hydro Electric Plc, and Jebba Hydro Electric plc.

The case will be coming up for hearing before Justice Nnamdi Dimgba on Wednesday.‎Apart from NERC, the other respondents to the originating summons amended on May 6, 2016, are the Senate and the Attorney-General of the Federation.
The plaintiffs, through their counsel, Mr. Olukayode Dada, filed the suit against the backdrop of the pressure being mounted on NERC by the Senate to review the tariffs being charged by the GENCOs.
The plaintiffs who claimed they filed the suit on behalf of themselves and other GENCOs operating in Nigeria, sought a court order restraining NERC from reversing the Multi-Year Tariff Order 2015, whether of its own accord or under pressure from the Nigerian Senate.
The MYTO, under the electricity market rules,  provides a 15 year tariff path for the Nigerian electricity industry with limited minor reviews each year in the light of changes in a limited number of parameters (such as inflation and gas prices) and major reviews every five years, when all of the inputs are reviewed with stakeholders.
‎The MYTO which became effective on February 1, 2016 was designed to cover the period 2015 to 2024.
‎The plaintiffs argued that  section 76 of the Electric Power Sector Reforms Act 2005, guaranteed that electricity tariffs would  be reflective of the costs (costs-reflective tariff)  incurred in the generation and distribution of electricity.
They  contended that since the privatisation of the Power Holding Company and the take-over of the power industry by private investors, electricity tariffs fixed by the NERC had never been cost-reflective.
The plaintiffs among other prayers seek, “a declaration that upon a proper interpretation of Section 76 of the Electric Power Sector Reform Act 2005, including the Regulations made there under, the 1st Defendant (whether of its own accord or under the pressure from the 2ndand/or 3rd Defendants) cannot lawfully amend, revise, withdraw or in any manner whatsoever tamper with the Multi Year Tariff Order 2015  which came into effect on 1stFebruary 2016 without complying with the procedures stipulated in the Electric Power Sector Reform Act 2005 and Regulations made there under, particularly the  Regulations on the  Procedure for Electricity Tariff Reviews in the Nigerian Electricity Supply Industry issued on 24th December 2014.”
They seek “a declaration  that it would be arbitrary, illegal and unlawful for the 1st Defendant ((whether of its own accord or under the pressure from the 2nd and/or 3rdDefendants) to amend, withdraw or reverse the extant Multi Year Tariff Order 2015  which came into effect on 1stFebruary 2016 other than in accordance with the strict provisions of Section 76 (9) and (10) the Electric Power Sector Reform Act, 2005  and the Regulations and Guidelines made thereunder, including the Procedure for Electricity Tariff Reviews in the Nigerian Electricity Supply Industry issued on 24th December 2014.”
They also want the court to grant  “an order restraining the 1st Defendant (whether of its own accord or under the pressure from the 2nd and/or 3rdDefendants) from amending, revising, withdrawing or in any manner whatsoever tampering with the extant Multi Year Tariff Order 2015 which came into effect on 1st February 2016 without complying with the procedures stipulated in the Electric Power Sector Reform Act 2005 and Regulations made thereunder, particularly the Regulations on the Procedure for Electricity Tariff Reviews in the Nigerian Electricity Supply Industry issued on 24th December 2014.”