Court Dismisses Manufacturers’ Bid to Halt Electricity Tariff Hike

A Federal High Court in Lagos has dismissed a lawsuit brought by the Manufacturers Association of Nigeria (MAN) seeking to halt the implementation of a revised electricity tariff by the Abuja Electricity Distribution Company (AEDC) and 11 other entities. The Nigerian Electricity Regulatory Commission (NERC) disclosed the ruling in a statement on its official X handle on Thursday.

This ruling marks a significant setback for the manufacturers’ efforts to reverse the electricity tariff hike, which they argue hampers economic growth and undermines market stability. MAN had challenged NERC’s decision to approve a tariff increase, particularly for Band A consumers, and filed the lawsuit at the Lagos Judicial Division of the Federal High Court.

NERC had introduced the tariff review in its supplementary Multi-Year Tariff Order (MYTO) on April 3, 2024, which initially raised the Band A tariff to N225/kWh, later reducing it to N206/kWh after further considerations of the economic environment.

“A Federal High Court sitting in Lagos has struck out a case by the Manufacturers Association of Nigeria challenging the implementation of electricity tariff review by the Abuja Electricity Distribution Company Plc and 11 others,” the commission stated.

Delivering its judgment on October 7, 2024, the court ruled that MAN’s lawsuit was premature and lacked merit, as it did not comply with the provisions of section 51 of the Electricity Act 2023. The court further noted that MAN had failed to exhaust the necessary dispute resolution mechanisms before approaching the court, rendering the case an abuse of court process.

The court ruled that MAN’s arguments did not present a reasonable cause of action, emphasising that the proper legal channels had not been followed. As a result, the court struck out the case.

In its lawsuit, MAN sought four key reliefs, primarily claiming that AEDC and the other distribution companies had not adhered to the legal process required for tariff reviews when applying for the changes in July 2023. MAN also argued that NERC’s issuance of the Supplementary Order in April 2024, followed by a further adjustment in May, violated regulatory protocols.

Additionally, MAN criticised the tariff increase for targeting Band A consumers while excluding other bands, calling the move discriminatory. The association insisted that all defendants must follow the administrative procedures for tariff review before implementing the changes.

However, NERC contested MAN’s claims, asserting that the lawsuit was hastily and prematurely filed, failing to observe the established legal processes. The commission characterised the case as an abuse of court process, arguing that the manufacturers had not followed due legal procedures.

“NERC had objected to the suit, stating that MAN’s case constitutes an abuse of court processes, being hasty and prematurely filed without following due process of the law,” the regulator said in its statement.

With the court’s dismissal of MAN’s case, the revised electricity tariffs are set to remain in effect, potentially heightening the financial burden on manufacturers already grappling with rising costs.