Nigeria’s Electricity Tariff  Hike: Any Impact On Productivity?
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Federal High Court Stops IKEDC, NERC Electricity Tariff Hike

4 weeks ago
2 mins read

Court Orders Ikeja Electric to Halt Tariff Implementation

The Federal High Court in Lagos, has issued an order restraining Ikeja Electric Plc and the Nigerian Electricity Regulatory Commission (NERC), from enforcing a recent tariff hike on “Band A” feeders.

The decision came after a hearing on an ex parte application filed by Rida National Plastics Limited, challenging the increased rates.

Interim Injunction Issued

Justice Chukwujeku Aneke granted an interim injunction, which temporarily halts the implementation of the tariff stipulated in the April 2024 Supplementary Order on Tariff Increase.

The court’s ruling, delivered on Tuesday, stated that the tariff hike, published on April 4 and further confirmed in May 2024, cannot be applied until full compliance with Section 51 of the Electricity Act, 2023, is achieved.

“The court recognises the need to balance the interests of both the service providers and the consumers,” said Justice Aneke. “This interim measure is essential to prevent undue hardship on the plaintiff pending a detailed examination of the case.”
READ ALSO: Labour Begins Indefinite Strike Monday Over Minimum Wage, Electricity Tariff Hike

Company’s Legal Challenge

Rida National Plastics Limited, represented by Dr. Kemi Pinheiro (SAN), with F. Giwa Esq and I. Aderibigbe Esq, initiated the legal challenge against Ikeja Electric and NERC.

The company is contesting the significant increase in its electricity bill, which included a N20 million charge based on the disputed tariff.

“We filed this application because the tariff hike imposed by Ikeja Electric is both sudden and exorbitant,” Dr. Pinheiro stated. “Our client cannot bear this financial burden without any prior notice or justification.”

Impact on Businesses

The tariff increase has raised concerns among businesses and consumers alike, many of whom are already struggling with high operational costs. The court’s injunction is seen as a temporary relief, allowing affected parties time to adjust and seek clarity on the legality and fairness of the tariff changes.

“We are relieved by the court’s decision,” said a representative of Rida National Plastics. “This gives us the opportunity to continue our operations without the immediate threat of disconnection or financial strain from an unexplained tariff hike.”

NERC and Ikeja Electric’s Response

Neither Ikeja Electric nor NERC has issued a formal statement in response to the court’s ruling. However, industry experts suggest that the regulatory body and the electricity provider will need to review their tariff policies to ensure compliance with the Electricity Act and avoid further legal challenges.

Next Steps

The case has been adjourned to July 9, 2024, for the hearing of the motion on notice. During this period, the interim injunction will remain in effect, preventing Ikeja Electric from disconnecting Rida National Plastics’ electricity supply or enforcing the tariff hike.

Justice Aneke emphasised the importance of due process in regulatory actions, stating, “Regulatory bodies must ensure transparency and fairness in their dealings. This court will not hesitate to intervene where necessary to protect the rights of consumers.”

The court’s decision marks a significant step in addressing the concerns of consumers and businesses affected by abrupt tariff changes.

As the legal proceedings continue, all eyes will be on the outcome, which could set a precedent for future regulatory practices in Nigeria’s electricity sector.

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Emmanuel Ochayi is a journalist. He is a graduate of the University of Lagos, School of first choice and the nations pride. Emmanuel is keen on exploring writing angles in different areas, including Business, climate change, politics, Education, and others.

Emmanuel Ochayi is a journalist. He is a graduate of the University of Lagos, School of first choice and the nations pride. Emmanuel is keen on exploring writing angles in different areas, including Business, climate change, politics, Education, and others.

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