Alleged Breaches: Electricity distribution firms sue NERC

Electricity Distribution companies in Enugu, Jos and Kano states have sued the Nigerian Electricity Regulatory Commis­sion (NERC) over alleged un­due interference in their oper­ations.

In an originating sum­mons filed by Oluseye Opasan­ya (SAN) and Ajibola Oluyede Godson on behalf of the pow­er firms, the DISCOs asked for the determination of the fol­lowing questions of construc­tion: “Whether, having regard to Sections 24(2)(3), 25, 26(1) and 82(1) of the Electricity Power Sector Reform Act 2005 (EPSRA), Order No. NERC/136 issued or made by the defendant – (declaring a “more competi­tive electricity market”, within the meaning of the term as used in EPSRA), and/or directing the commencement of the Transi­tional Stage Electricity Market (TEM Order)- is not ultra vires and therefore null and void.

They also urged the court to determine whether, hav­ing regard to Sections 24(2)(3), 25, 26(1) and 82(1) of EP­SRA, Supplementary Order No: NERC/15/0011 (Supplementa­ry TEM Order) – (purporting to provide for the effective ad­ministration and operation of the Transitional Stage Electric­ity Market (TEM), or a frame­work for addressing the opera­tional aspects of the said more competitive electricity market, by the defendant) - is not ultra vires on the powers of NERC, and therefore null and void; or in the alternative:

“Whether, having regard to Section 32(1) (a) & (f), EPSRA and Section 7 of Market Rules (as amended) 2014, the TEM Order and the Supplementary TEM Order are not illegal, and therefore null and void.”

Similarly, the DISCOs asked the court to determine whether, having regard to Sec­tions 83 and 86 of EPSRA, and other conditions precedent re­quired by EPSRA, the TEM Order and the Supplementa­ry TEM Order are not prema­ture and therefore (ineffectual, or unenforceable, if not) null and void.

In their fifth prayer, the elec­tricity firms also want the court to determine whether, having regard to Section 44 of the Con­stitution of the Federal Republic of Nigeria 1999 (as amended), NERC’s directive referenced: NERC/MC&R/16/098 dated 30th March, 2016 (Escrow Let­ter) and the attached Guide­lines for Escrowing Collection Accounts of Electricity Distri­bution Companies in Nigeria (Escrow Guidelines) are not unconstitutional, and there­fore null and void.

Whether, having regard to Section 25 of the Nigerian In­vestment Promotion Act, Cap N117, Laws of the Federation of Nigeria 2004, the Escrow Let­ter and Escrow Guidelines do not constitute unlawful expro­priation of the Plaintiffs’ prop­erty rights and therefore null and void. 7. (If any of questions one to six above is answered in the affirmative), whether this honourable Court ought not to set aside all directives, ac­tions, decisions and steps tak­en by the Defendant, (for itself or other persons), on the ba­sis of TEM Order and Supple­mentary TEM Order, includ­ing but not limited to Escrow Letter and Escrow Guidelines.

The plaintiffs therefore sought the following reliefs:

“A declaration that the TEM Order issued by the de­fendant ultra vires the powers of the defendant, and therefore null and void.

“A declaration that the Sup­plementary TEM Order issued by the defendant, is ultra vires the powers of the Defendant, and therefore null and void.

“A declaration, (as an alter­native to reliefs one and two above), that the conditions prescribed by law for the dec­laration of TEM have not ma­terialised, as such the TEM Or­der and Supplementary TEM Order are premature, (ineffec­tual, or unenforceable, if not), null and void.

“A declaration that the is­sue or making or implementa­tion of the Escrow Letter and the Escrow Guidelines is un­constitutional having regard to Section 44 of the Constitution of the Federal Republic of Ni­geria 1999 (as amended).

They also sought for “an or­der setting aside all directives, decisions, actions and steps taken by the Defendant, aris­ing or derived from, based on, or relating to, the TEM Order and the Supplementary TEM Order, including but not lim­ited to the Escrow Letter and the Escrow Guidelines,” among others.