HomeIndustry SectorsFinance and PolicyNERC bites back around Federal High Court demand

NERC bites back around Federal High Court demand

In West Africa, the Nigerian Electricity Regulatory Commission (NERC) is pushing back against the Federal High Court in Lagos, around the refusal of the Commission’s proposed multi-year tariff order (MYTO).

Last week, Justice Mohammed Idris, demanded that the Commission revoke its MYTO for a 45% tariff increase, as he claims the process that led to the hike in electricity charges was illegal, Premium Times reported.

NERC: Electricity sector to feel the effect

According to media, the acting chairman of the commission, Anthony Akah, described the court order as “a major setback to the progress made so far in the electricity sector”.

On Friday, Akah said that the Commission respects the decision, however they would challenge it.

“This judgment, in our view, represents the reversal of the commercial foundation upon which contracts for gas, hydro, coal and solar feed-stocks for the production of electricity were predicated,” he said.

He added: “It also extends to other service improvement contracts entered into by the operators for the development of electricity sector and the ultimate improvement in the quality of service delivery to consumers.”

Taking legal action

Media reported that Akah said the commission had already discussed with its legal team to file for a stay-of-execution of the order, while a notice of appeal of the judgment had been issued.

The NERC chairman said the commission reserved the right to explore other legal avenues within the law to challenge the decision.

[quote]With attempts to reassure investors, Akah noted that the Commission remained committed to the provision of the right regulatory framework to promote private investment in the electricity supply industry, Premium Times reported.

“We are going to study the full judgment, and based on the interpretations in it, would react appropriately. The electricity sector is a very complex industry which thrives on regulatory certainty.

“The MYTO 2015, which the court order declared illegal, provided a long-term pact to prospective investors to determine in advance what the tariffs would be, Based on it, a lot of improvement and progress in the sector were recorded, because most people based their investment decisions on it.”



Ashley Theron
Ashley Theron-Ord is based in Cape Town, South Africa at Clarion Events-Africa. She is the Senior Content Producer across media brands including ESI Africa, Smart Energy International, Power Engineering International and Mining Review Africa.