On April 3, 2024, the Nigerian Electricity Regulatory Commission (NERC) approved an increase in electricity tariff for customers under the Band A classification.
The Distribution Companies (DisCos) are to charge the affected customers N225 per kW.
Following the policy pronouncement, the leadership of the Manufacturers Association of Nigeria (MAN), wrote to NERC demanding a reversal or indefinite suspension of the implementation of the new electricity tariff rate in the supplementary multi-year tariff order of 3rd April 2024.
Consequently,NERC arranged for the petition hearing which took place at the NERC headquarters in Abuja.
During the hearing, MAN through its legal counsel and the Director- General of MAN, Segun Ajayi-Kadir, tabled the reasons for the petition for the tariff reversal.
The MAN DG, submitted that the crux of the matter is that manufacturers are asked to pay electricity bills that will take manufacturers out of business.
He said: “A company told me that it was paying N7-8 million before, now it is paying N32 million.
The calculation is that the profit you could have made, you are not able to make it.
So, you need to decide to go ahead and produce and pay an electricity bill that is more than the profit you would have made or shut down.”
During the hearing, intervenors comprising representatives of power firms and power sector experts also presented their cases on the prevailing situation of the macro-economic indices against which the tariff adjustment was made.
In response, the Vice Chairman and chairman of the petition hearing team, Dr. Musiliu Oseni, noted the submissions from MAN as well as from intervenors. According to him, based on the submission by MAN, and those from the intervenors, NERC will make a ruling on the petition during a thirty-day window plus an extension of fifteen days.
But while waiting for the ruling, 10 of the association’s members had been disconnected in Kano.
“We do not favour legal action against the DisCos and NERC. We do not want to go there. One of our branches has done so, and that subsists. The DisCo in Kano is still disconnecting our members despite the injunction,” said Ajayi-Kadir.
He said: “
As an association, we do not want to engage in such (legal action) but it comes as a last resort.
“You can imagine that as of today, more than 100 of our members have been disconnected, which means that their workers have been asked to go home.
It means that their production processes have been halted.
It means that they are not able to fulfil their obligations to their suppliers, and they have started to lose money.
So, we are gradually seeing a situation where more and more industries are shutting down, because if you disconnect an industry that does not have an alternative source of power, it practically goes out of business,” he stated.
Besides the Kano High Court’s, a high court in Lagos has issued an interim order restraining 10 (DisCos) and (NERC) from increasing tariff.
Lewis Allagoa, the presiding judge, granted the ex parte order on Monday.
In the court document, MAN was the applicant in the suit marked FHC/L/CS/881/2024.
The DisCos, which are the first respondents include the Abuja Electricity Distribution Company (AEDC), the Ibadan Electricity Distribution Company (IBEDC), the Eko Electricity Distribution Company (EKEDC), the Ikeja Electricity Distribution Company (IKEDC), and the Kaduna Electricity Distribution Company (KAEDC).
Others are Kano Electricity Distribution Company (KAEDC), Jos Electricity Distribution Company (JEDC), Benin Electricity Distribution Company (BEDC), Enugu Electricity Distribution Company (EEDC), Port Harcourt Electricity Distribution Company (PHEDC), and Yola Electricity Distribution Company (YEDC).
The NERC is the second respondent in the suit, according to the document.
The applicant prayed that the DisCos and the electricity regulatory body should allow the old electricity tariff to be used.
After careful consideration of the application and submissions of the applicant, the court ordered that the respondents be restrained from taking any further steps, including the disconnection of power supply, pending the determination of the motion in this matter.
“That the order is without prejudice to the obligation of the plaintiff from paying their electricity bill at the old rate,” the court said.
The matter was, therefore, adjourned to June 24 for hearing.