Legal Setback For Manufacturers As Court Dismisses Electricity Tariff Challenge

Legal Setback For Manufacturers As Court Dismisses Electricity Tariff ChallengeThe Federal High Court in Lagos has dismissed a lawsuit filed by the Manufacturers Association of Nigeria (MAN) challenging the implementation of the Band A electricity tariff review by the Abuja Electricity Distribution Company (AEDC) and 11 other parties. The Nigerian Electricity Regulatory Commission (NERC) announced on Thursday that the court’s ruling, delivered on Monday, addressed the arguments from all involved parties.....KINDLY READ THE FULL STORY HERE▶

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The court determined that MAN’s lawsuit constituted an abuse of the judicial process, deeming it premature and inconsistent with Section 51 of the Electricity Act of 2023. According to NERC, the court noted that MAN’s claims did not present a reasonable cause of action, as the association had failed to exhaust available dispute resolution mechanisms. Consequently, the court struck out the case as improperly instituted.

MAN initially filed the lawsuit in the Lagos Judicial Division of the Federal High Court, disputing a minor electricity tariff review conducted by NERC. The association sought four primary reliefs, arguing that the proper procedures outlined in the Electricity Act were ignored when AEDC and other entities applied to NERC for tariff adjustments on July 31, 2023.

Additionally, MAN contended that regulatory requirements were bypassed before NERC issued the Supplementary Order on April 3, 2024, and the revised tariff rate on May 6, 2024. They also claimed that limiting the tariff hike to Band A consumers while excluding other bands was discriminatory against those in Band A. The association urged that the defendants adhere to proper administrative procedures for tariff adjustments before implementing the April and May supplementary orders.

In its defense, NERC countered MAN’s claims, arguing that the case was premature and had circumvented due legal processes. NERC stated that the lawsuit lacked standing since it did not follow the established legal avenues for dispute resolution.

Band A customers, classified as premium consumers, do not receive government subsidies but are guaranteed at least 20 hours of electricity daily. However, with a rate of ₦209.50 per kilowatt-hour, manufacturers in this category have reported a significant increase in their electricity bills, adversely affecting their production costs.