How delayed court judgement plunged FG, manufacturers into debt — NERC

The Nigerian Electricity Regulatory Commission (NERC) has narrated how a delayed court judgement cost the Federal Government billions of naira and plunging manufacturers into debt.

The NERC Chairman, Sanusi Garba made this revelation at the 4th NERC seminar for Judges holding in Abuja.

Speaking, the NERC Chairman said, “For several years, this seminar has been a tradition and a recurring item in the Commission’s work plan until recently when steering the reform agenda took the front burner.”

He identified one of the key objectives of the seminar as aimed at stimulating a discourse on emerging legal issues relating to the Nigerian Electricity Supply Industry; and to apprise the judiciary of the recent changes in the regulatory landscape.

“Our Commission is vested with delegated powers to enact subsidiary legislation relating to the workings of the power sector. Therefore, NERÆ has powers to issue regulations and technical codes that should be complied with by all industry participants and licensees.

“The Commission further has a quasi-judicial function under which NERC Commissioners often sit as a panel to hear and adjudicate on matters relating to disputes, appeals, objections, rates, etc. in the industry. However, the success of this aspect of our work at the Commission is at the intersection of this delegated responsibility and the work of the judiciary,” He explained.

Commenting on the challenges the sector is plagued with, the NERC Chairman said, “the Nigerian Power Sector, over several years, has gone through very difficult times, but even more difficult since the commencement of the reform agenda. The reform of any economic sector often requires a number of very difficult decisions, most often with a potential for impact on the welfare of the wider public. This is relevant, as the institutions we regulate are public utilities providing essential services to the Nigerian public.

“In setting the context of our operating environment, I crave your indulgence for a bit of recent history. A civil rights lawyer commenced action against the Commission & 11 Distribution Companies (DisCos) in May 2016. This action was triggered by the Tariff Order issued by the Commission prescribing the rates chargeable by DisCos, effective 1st January 2015.

“The questions for determination were principally whether NERC had lawfully approved an increase in tariffs without significant improvement in supply; and whether NERC had sufficiently consulted prior to the approval of the new rates.

“The court hearing the matter granted an injunction on the implementation of the Tariff Order issued by the Commission, literally suspending the new rates payable by consumers. This singular action stalled the reform of the electricity market for several years while awaiting a determination of the court.

“The consequence of the protracted delay created a fiscal burden of billions of Naira on the Federal Government arising from revenue shortfalls for market participants. The Manufacturers Association of Nigeria (MAN) that joined in resisting the new rates are now heavily indebted in billions to DisCos and there seems to be no path to recovery, even in the medium term,” Sanusi narrated.

He added that the benefits of a seminar such as the one it is hosting may have led to a different outcome, by expediting a decision of the courts on the matter, in acknowledgement of the contingent risks of the litigation.

Sanusi also encouraged the judiciary members present to partner with the regulator in eradicating patches of darkness in Nigeria.