The Nation Newspaper

Tag: electricity tariff

  • ‘Enforce court order on electricity tariff’

    The President of the Nigeria Labour Congress (NLC), Comrade Ayuba Wabba, has urged the Federal Government to enforce last Wednesday’s Federal High Court order annulling the Nigerian Electricity Regulatory Commission’s (NERC’s) 45 per cent increase in tariff.

    Speaking in Lagos at the weekend, Wabba advised NERC to obey the court order.

    He said: “We urge the regulatory body to comply with this judgment. The Presidency must prevail on the regulatory body.

    “If indeed this is a democratic government that respects the rule of law, the illegal tariff hike must be reversed, as we will not hesitate to bring contempt proceedings against whosoever is to comply or ensure compliance,” he said.

  • Federal High Court nullifies electricity tariff hike

    The Federal High Court, Lagos Division, yesterday, nullified the increment in tariff announced last December 21, by the Nigerian Electricity Regulatory Commission (NERC).

    Justice Mohammed Idris ordered NERC to revert to the former tariff and restrained it from further increasing tariff “unless it complies strictly with the relevant provisions of the Electricity Power Sector Reform Act (EPSRA) 2005.”

    The judge delivered the judgment in a suit filed by human rights lawyer, Mr. Toluwani Yemi Adebiyi, who challenged the increment.

    Justice Idris described NERC’s action as “procedurally ultra vires, irrational, irregular and illegal,” and awarded N50,000 in the plaintiff’s favour.

    In deciding the substantive suit, the court relied on sections 31, 32 and 76 of the EPSRA, and held that NERC “acted outside the powers conferred on it by the Act and failed to follow the prescribed procedure.”

    The court added that NERC failed to show that it acted in due obedience to the prescribed procedures and that “there is no evidence that NERC complied with Section 76 (6)(7)and (9) of the EPSRA Act.”

    “Of all the legal requirements, it appeared that the only one complied with by NERC was that it announced the new tariff in the newspapers,” Justice Idris said

    He added: “It is clear from the affidavit evidence that the increase in tariff was done by NERC in defiance of the order of this court made on May 28, 2015, which directed parties in the case to maintain the status quo.”

     The court made the following orders: “The increment in electricity tariff which took effect after the institution of this action and while a restraining order is subsisting is hereby declared illegal and same is hereby set aside.

    “NERC is hereby directed to reverse to the status quo and the commission is hereby restrained from further increasing electricity tariff except it complies strictly with the relevant provisions of the EPSRA.”

    The sum of N50,000 was also awarded in favour of the plaintiff.

    The Nigeria Labour Congress (NLC) yesterday hailed the judgment.

    In a statement  in Abuja, President of the Congress, Comrade Ayuba Wabba said: “We at the Nigeria Labour Congress wish to state that this is a courageous and judicial judgement deserving of commendation. We also consider it victory for the ordinary Nigerian who has been crushed by exploitative bills.

    “Similarly, we urge NERC and DISCOs to obey the judgment and revert to the old rates without further delay. We demand that the NERC and DISCOs observe all the conditions precedent as contained in the sales agreement before any increase be made.”

     

  • Electricity tariff: NLC to declare national warning strike

    Electricity tariff: NLC to declare national warning strike

    The Nigeria Labour Congress (NLC) says it will declare a one-day national warning strike over the refusal of the Federal Government to reduce the electricity tariff.

    NLC President Ayuba Wabba said this while addressing newsmen during the Central Working Committee (CWC) meeting of the congress on Wednesday in Abuja.

    The News Agency of Nigeria (NAN) recalls that on Jan. 29, the NLC led the picketing of electricity distribution companies (DISCOs) nationwide, the Nigeria Electricity Regulatory Commission, and the National Assembly.

    The action, aimed at getting the Federal govern to reverse the 45 per cent tariff hike did not yield the desired result.

    Wabba insisted that the tariff increase was “illegal, unfair, unjustifiable and an exploitation of the already exploited Nigerians.

    “The privatisation of the power sector was done in bad faith and it has become obvious that the investors did not have the capacity to improve power generation and supply in the country.

    “The CWC will agree on a day to embark on the strike, because several actions promised by the Federal Government to checkmate the tariff increment have not been implemented.’’

    He also noted that the current fuel scarcity in the country had brought untold hardship to workers and Nigerians as a whole.

    “We must, however, make the point that spells of scarcity will not be acceptable to Labour and other Nigerians because the human and economic costs are unimaginable.

    “We have being patient with this government but this persistence scarcity and suffering of our people will no longer be tolerated.’’

    The NLC president also frowned at the failure of the government to constitute the board of the Petroleum Products Pricing Regulatory Agency (PPPRA).

    He said that no individual had the right to fix the prices of petroleum products.

    “We demand the constitution of the board of NNPC and PPPRA. The latter is a 26-man board vested with powers of regulating prices of petroleum products. Today, it is a one-man show.”

    On the economy, Wabba noted that Nigerians were groaning under harsh economic conditions.

    He urged on President Muhammadu Buhari to take urgent steps to implement the budget.

    “Government must consult more widely and come up with an enduring solution,” Wabba said.

     

  • Mob protests high electricity tariff

    Mob protests high electricity tariff

    SOME aggrieved Ikorodu, Lagos residents last Friday stormed a branch of Ikeja Electric (IE); a power distribution firm, protesting high electricity bills.

    The protesting Asojon Community carried placards complaining about the “killing” bills.

    Some of the inscriptions read: “This is not just crazy bill, it is mere wickedness”, “No to estimated bills, this is forced debt”, “IE is another slave master, stop rolling debt on us”.

    The community’s chairman, Chaplain Victor Kene-Okafor, said the residents were paying more because of the new tariff introduced last February 1.

    “I used to pay between N3000 and N4000 but the bill the marketer brought presently read N9000. When I asked her, she said they are charging new tariff,” Kene-Okafor said.

    A resident, Mr Stephen Wanogho, asked IE to provide them with meters and stop giving them estimated bills.

    He said: “We want prepaid meters so that they can effectively charge us and they can stop giving us crazy bills”.

    Another resident, Mr Jegbefume Henry, said: “We are not saying that we will not pay electricity bills, we are only asking to be charged fairly. My wife was charged N12,000 for only a shop”.

     

  • ‘NASS, judiciary cannot reverse new electricity tariff’

    ‘NASS, judiciary cannot reverse new electricity tariff’

    The National Assembly and the Judiciary’s resistance cannot achieve the reversal of the new electricity tariff, an expert in Energy Jurisprudence, Dr Ayoade Adebayo has said.

    Adedayo, who was the Head, Department of Energy Law, University of Lagos (UNILAG), said neither a judicial pronouncement nor pressure from the National Assembly can reverse the new tarifff, adding that it is only the Nigerian Electricity Regulatory Commission (NERC) that can legally do so.

    He told The Nation that it is only NERC’s chairman and his commissioners can  reverse tariff as stipulated in the Electricity Power Sector Reform (ESPR) Act of 2005,  and not any arm of the government.

    He said: “The NERC is being run by an acting Chief Executive Officer, instead of a chairman and commissioners, who are empowered to suspend or reverse the tariff in accordance with the Electricity Power Sector Reform Act of 2005.  Therefore, both the politicians and the courts cannot achieve meaningful results on the issue.

    “It is only when the Board of the Commission is reconstituted by the Federal Government, and a chairman and commissioners were appointed to handle it that a reversal of the new tariff can take place. There is nowhere in the world that electricity business is politicissed and it records success.  Electricity issues are sensitive and should not be trivialised, and if we trivialise it, we would enjoy it.

    “A lot of calculations must be made before tariff is fixed. This is being done in order to enable investors get returns on investment.  At this juncture, some questions need to be asked. What are the politicians who are representing their constituencies in the National Assembly doing on the issue? What would the court say on the issue supposing the matter is taken to court? They are doing nothing.”

    According to him, the responsibility of fixing the tariff or reviewing it lies with the NERC.

    Adedayo said NERC is one of the agencies, whose role is key to the success of an administration in the country. He said the Board of NERC and other sensitive agencies are vital to the sector, adding that the only way the government can show Nigerians that the board of NERC is relevant, is to re-constitute it as soon as possible, in order to effectively manage the power sector.

    He said the sector requires between $50billion and $100 billion to produce the megawatts (Mw) of electricity that would make industries operate at optimal capacity, adding that achieving the feat is not possible when people play politics with the sector.

    The National Assembly has kicked against the tariff by the Federal Government. Prior to its introduction last month, the National Assembly, human rights groups, members of Organised Private Sector (OPS), such as the Manufacturers Association of Nigeria (MAN), Lagos Chamber of Commerce and Industries (LCCI) and others, have tried to stop the government from implementing it but to no avail.

  • Electricity tariff: Court refuses NERC’s bid to halt case

    Electricity tariff: Court refuses NERC’s bid to halt case

    • Awards cost against commission

    The Federal High Court in Lagos yesterday dismissed an application by the Nigerian Electricity Regulatory Commission (NERC) seeking to stay proceedings in the suit on electricity tariff hike.

    Justice Mohammed Idris refused the motion for being unmeritorious.

    He awarded a punitive cost of N10,000 against NERC.

    Activist-lawyer Toluwani Adebiyi, who obtained an order restraining NERC from increasing tariff, initiated contempt proceedings against the commission’s chairman and chief executives of electricity distribution companies.

    He contends that the tariff increased was announced while the order made by Justice Idris was subsisting.

    NERC, through its lawyer Anthony Idigbe (SAN), prayed for a stay of proceedings pending the determination of an appeal against the order that parties maintain status quo.

    Arguing the application, Idigbe said the court should defer to the Court of Appeal.

    But, Adebiyi said there was no evidence that NERC filed an appeal. He urged the court to hold the defendants in contempt.

    “As far as the application of stay of proceedings, no such proof has been entered. That application contains no appeal number.

    “It is worthless, of no substance, dead and incurably defective,” Adebiyi argued.

    Dismissing the application, Justice Idris held that contrary NERC’s claims, there was no indication that the appeal has been listed for hearing at the Appeal Court.

    “It is clear that the applicant has an application before the court seeking for an extension of time to compile and transmit its record at the Appeal Court.

    “There is also another motion for leave to rely on the same record of appeal in the present appeal.

    “However, there is no indication that the application has been listed on the cause list or that it had been heard or adjourned for hearing.

    “In the circumstance, this court cannot grant a stay of proceedings on an incompetent appeal which is awaiting regularisation at the Appeal Court,” the judge said.

    Justice Idris, therefore, held: “This application lacks merit and is hereby dismissed.”

    After the ruling, there were arguments as to which pending application should be taken next.

    Adebiyi insisted that the ruling has cleared the way for the hearing of his motion for contempt.

    Justice Idris adjourned till February 29 for ruling.

  • Much ado about new electricity tariff

    Much ado about new electricity tariff

    The new electricity tariff announced by the Nigeria Electricity Regulatory Commission which kicked off on February 1, 2016, has set the federal government, the electricity distribution companies (DISCOs), Generation Companies (GENCOs) as well as the organised labour and the National Assembly on a collision course, reports Ibrahim Apekhade Yusuf

    s the new electricity tariff a fait accompli? That is the question being asked by the electricity consuming public, many of who are hard pressed to believe that they would have to pay more despite not getting value for their money.

     

    Crux of the matter

    In the circular announcing the new tariff regime signed by Dr. Usman Abba-Arabi- Head, Public Affairs of the NERC, he said part of the concession announced by the acting Head of the Commission, Dr. Anthony Akah is the removal of fixed charge under the new tariff regime, a decision, he maintained, as taken in deference “to consumers and a measure to ensure electricity distribution companies improve on service delivery as their income is dependent on the quantity of electricity used by their customers.”

    However, the new tariff will see some residential customers paying between N4 and N41.31 per kilowatt/hour or a little more depending on consumption and DISCOs of the customer. The distribution companies get 25 per cent.

    In line with the multi-year tariff order (MYTO), the tariff will go up in two years and subsequently reduce in the coming years.

     

    Imprimatur of support for electricity tariff hike

    The Minister of Power, Works and Housing, Mr. Babatunde Fashola, while justifying the 45 per cent increment in electricity tariff, maintained that the action remained the only way to enhance stable power supply in the country.

    Fashola, who stated this when he appeared before the Senate Committee on Power, explained that an Act of the National Assembly actually empowered the Nigerian Electricity Regulatory Commission to increase tariff, hence it would not be able to stop the implementation of the new tariff regime at this stage.

    He explained that the rise in the cost of procuring raw materials to generate electricity was one of the reasons for increasing the tariff and that the best way to sustain the current stable power supply in the country.

    Fashola maintained that the federal government and consumers had a duty to sustain the current tempo in the power sector by encouraging the power generating firms to produce maximally at the right price level.

    Shedding more light on the foregoing, Sunday Oduntan, speaking under their umbrella body, Association of Nigerian Electricity Distributors (ANED), the DISCOs said power consumers’ cooperation has become imperative so as to ensure a hitch free service delivery.

    Oduntan who is Executive Director, Research and Advocacy of ANED, urged the customers to pay their electricity bills for the growth of the power industry and the economy.

    Nigerians, he lamented, only pay for 40 per cent of electricity supplied, a situation, he admits, creates grave financial constraints for the entire value chain.

    While attempting a comparative analysis of what obtains within the continent, he said Chad has the highest tariff, while Zambia has the lowest followed by Nigeria.

    According to Oduntan, of the new tariff, 60 per cent of the total money collected goes to the generation companies that in turn, pay the gas suppliers, while 11 per cent goes to the transmission company, four per cent to the regulator, bulk trader and market operator.

     

    Organised labour will not be persuaded

    Alarmed by what it described as illegality of the new electricity policy regime, the Nigeria Labour Congress, NLC, Trade Union Congress of Nigeria, TUC, alongside civil society allies would not be persuaded by what they described as unwarranted tariff increase.

    In a statement signed by Mr. Ayuba Wabba, President of NLC, labour decried what it described as the 45 per cent increase in the electricity tariff as announced by NERC.

    Expectedly, the organised labour picketed all offices of the DISCOs, GENCOs, nationwide and the office of the NERC as planned,

    Giving reasons for the protest, labour said: “The due process in the extant laws for such increment was not followed in consonance with section 76 of the Power Sector Reform Act, 2005.

    “There has been no significant improvement in service delivery. Moreover, the fact is that most consumers are not metered in accordance with the signed privatisation Memorandum of Understanding, MOU, of November 1, 2013, which stipulates that within 18 months gestation period, all consumers are to be metered.”

    In the statement which reads in part, the NLC leader said: “This protest rally has become necessary after all effort to make NERC shelve the idea of increase failed. Indeed, rather than see reason with Nigerians, the Minister of Power, Works and Housing has been advancing spurious arguments in justification.”

    A human rights lawyer, Bar. Toluwani Yemi-Adebiyi had approached the Federal High Court to charge the management of the electricity distribution companies and the NERC for contempt of court.

    Expatiating, he said: “The power sector has illogically taken the bull by the horn by contemptuously increasing the electricity tariff, in spite of the subsisting Order of Court not to bring any Increment until the Substantive Suit is determined.”

    The activist lawyer who said the plaintiffs were guilty as charged. “Form 48, Notice of disobedience of Court Order had been filed. Filing of Form 49 in Conjunction with Order 35 of the Federal High Court will follow thereafter,” he said.

    In a supporting affidavit, the plaintiff said despite NERC’s mission of “keeping the light on and to meet the needs of Nigeria for safe, adequate, reliable and affordable electricity,” most communities do not get more than 30 minutes of electricity supply daily.

    “Poor masses are paying an estimated and indiscriminate bills ranging from N5, 000 to N18, 000, while spending an average of N15, 000 to N20, 000 for fuel to maintain generating sets weekly. Businesses have collapsed, industries have closed down, and residents cannot sleep comfortably at night due to inefficiency of our power industry.

    “Companies and commercial houses are groaning under throat-cutting power bills which they are paying for, yet not getting the benefits of such payment,” Adebiyi stated.

    But NERC’s lawyer, Chief Anthony Idigbe (SAN), said he had filed an appeal against the order by Justice Idris.

    He said he also had a pending application for stay of proceedings pending determination of the appeal.

    But Idigbe said the application for stay of proceedings should take precedence since an appeal has been lodged.

    Ruling, Justice Idris said after a careful examination of the records of court, there were a number of pending applications to be dispensed with.

    Justice Idris said: “I understand it to be the law that contempt proceedings are criminal in nature and should therefore ordinarily in the context of our jurisprudence be first dealt with either by the court trying the case when the alleged contempt took place or by another court.

    “The purpose of taking contempt proceedings first is to demonstrate to the public that the court being the creation of the Constitution to decide cases between all manners of litigants vide Section 6 of the Constitution should protect its dignity and will neither allow a citizen nor any other arm of government to brazenly do an act that will diminish the powers duly invested by the Constitution and the common law in the administration of justice.

    “On the other hand, the basis upon which the contempt application is premised, which is the order that parties maintain status quo ante-bellum, is on appeal, and there is a motion for stay of proceedings in this suit pending appeal.

    “It is in the interest of justice, therefore, that this application to stay further proceedings be heard and determined. Until then, no further proceedings should go on. I will, therefore, take arguments on the application to stay further proceedings in this suit.”

     

    Shape of things to come

    In what appears to be a groundswell of support, the Senate had last Tuesday mandated the NERC to halt the 45 percent tariff increase being implemented by electricity distribution companies.

    This development was as a result of the deadlock in discussions between the Senate leadership and the Minister of Power, Works and Housing, Babatunde Fashola and his counterpart in the Labour and Employment ministry, Dr. Chris Ngige.

    The Nation gathered that the upper legislative chamber had asked the NERC to maintain the status quo pending the outcome of further deliberations with the ministers.

    The motion to suspend the implementation of the new tariff which came was moved by Senator Suleiman Nazif (APC, Bauchi).

    Echoing similar sentiments, Deputy Senate President, Ike Ekweremadu, said Nigerians were already on life support and urged his colleagues to reject the new increment and stand with Nigerians.

    Several other speakers, including Senator Dino Melaye, urged lawmakers to look beyond the suspension of the new tariff regime.

    Melaye said, “This increase makes it the fourth time that electricity tariffs will be up after the privatisation of the power sector. Their excuse has always been that they want to improve on the electricity. There was a time that the government gave loans to distribution and generation companies to buy metres and give to customers. They are yet to pay back that loan.

    Expectedly, Senate President, Bukola Saraki mandated the Senate Committees on Labour and Power to meet with the relevant agencies of government with the view to finding a lasting solution after public hearings on the matter.

    Meanwhile, the NLC may have commenced the process of compelling the NERC to reverse the recent increase in electricity tariff.

    Comrade Wabba in a statement made available to The Nation in Abuja said:”We wish to assure all Nigerians that we are focused on the main objective of our campaign to ensure that the tariff increase does not stand.”

    But it does appear the federal government has already considered the new policy regime as a fait accompli judging by the preparedness DISCOs to go ahead with the implementation.

    But will Nigerians have to pay more for electricity, or will labour succeed in making the DISCOs bring down the price of the product Nigerians hardly enjoy?

    So, between labour and the DISCOs who will back down, or will there be a middle ground?

    Time will tell.

  • NLC, NASS, govt meet over reversal of electricity tariff

    NLC, NASS, govt meet over reversal of electricity tariff

    The Nigeria Labour Congress (NLC) Wednesday assured Nigerians that organised labour has commenced the process of compelling the Nigeria Electricity Regulatory Commission and operators of the nation’s power sector to reverse the recent increase in electricity tariff.

    President of the Congress, Comrade Ayuba Wabba said in a statement made available to The Nation in Abuja that organised Labour held series of meetings with the leadership of the National Assembly and the Government with a view to effecting the tariff reversal.

    He expressed gratitude to Nigerians for turning out enmass across the country to protest the increase in tariff, pointing out that organised labour still believe that Nigerians should not be made to pay for the inefficiencies of operators of the power sector.

    The statement reads:”The leadership of the Nigeria Labour Congress and our colleagues in the Trade Union Congress wish to express our profound appreciation and gratitude to Nigerian workers and people for coming out en mass across the country on the nationwide protest rally we called to voice our opposition to the 45 percent increase in electricity tariff which came into effect on February 1, 2016.

    “We wish to, in particular, commend our civil society allies who stood firmly with organised labour through the planning and execution of the February 8th rally. We thank Nigerians from all walks of life who saw the wisdom of our action and identified with the campaign.

    “Since the nationwide rally, the leadership of organised labour and our colleagues in civil society have been meeting with the leadership of the National Assembly, with the Senate President, Dr Bukola Saraki, and the Speaker of the House of Representatives, Hon. Yakubu Dogara, being present to underscore the importance they attach to this issue which affects every household in the country.

    “We are also having a meeting with the Federal Government under the Chairmanship of the Secretary to the Government of the Federation (SGF), Babachir David Lawal, Minister of Labour and Employment Senator Chris Ngige with a view to annulling the 45 percent tariff increase.

    “We wish to assure all Nigerians that we are focused on the main objective of our campaign to ensure that the tariff increase does not stand.

    “As we have argued in the course of the rally, we maintain that Nigerians should not be compelled to pay more for darkness, against the background of the flagrant disregard of the terms on which the distribution companies (DISCOs) and generation companies (GENCOs) were awarded our common patrimony in the name of privatisation.

    These companies have failed, for instance, to provide prepaid metres as stipulated in the terms of their contract. They have instead continued to violate this special clause by charging and forcing consumers to pay the arbitrary tariffs they have imposed, even as they fail most of the time to provide them the required electricity.”

    NLC President commended the governor for having the courage to reverse his action and recall the about 6000 workers wrongly sacked and expressed the hope that the committee set up to implement the agreement reached between labour and the government will faithfully carry out its assignment.

    He said: “The leadership of both NLC and TUC also wish to express appreciation to all affiliate industrial unions for mobilising their members to turn out in massive numbers for our action of closing down government and commercial activities in Owerri, the lmo State capital on February 10, 2016 to press home our demands for the recall of about 6000 lmo State workers in government parastatals wrongly sacked by the state governor, Rochas Okorocha.

    “While we thank the entire people of Imo State for their uncommon understanding and solidarity with our actions to protect the fundamental rights of workers in the state, we wish to acknowledge Governor Okorocha for having the courage to reverse himself once we convinced him that his action was unlawful and wrongheaded.

    “It is our hope that the committee put in place to implement the agreement entered into between us and the lmo State government will faithfully implement the terms of the agreement so that we could put behind us the ugly and unpleasant situation created by the purported sacking of the workers.

    “Our hope is that governments in other states, or even at the federal level, will learn from the lmo State case, to avoid creating situations that will bring organised labour to be at loggerheads with them on account of unjust and anti-worker policies.”

  • Senate to NERC: halt electricity tariff hike

    Senate to NERC: halt electricity tariff hike

    The Senate yesterday told the Nigerian Electricity Regulatory Commission (NERC) to stop the 45 per cent tariff increase being implemented by electricity distribution companies.

    This followed a deadlock in discussions between the Senate leadership on the one hand and the Minister of Power, Works and Housing, Babatunde Fashola and his counterpart in the Labour and Employment ministry, Dr. Chris Ngige.

    The position of the Senate is however being contested by the two ministers who have accepted the increase.

    It was gathered on Tuesday that the upper legislative chamber had asked the NERC to maintain the status quo, depending on the outcome of further deliberations with the ministers.

    The motion to suspend the implementation of the new tariff was moved by Senator Suleiman Nazif (APC, Bauchi).

    He argued that considering current economic realities, it was unrealistic to increase electricity tariffs.

    Supporting the motion, Deputy Senate President Ike Ekweremadu said Nigerians were already on life support and urged his colleagues to reject the new increment and stand with Nigerians.

    Also, Senator Albert Bassey supported the suspension of the increase. “I want to join the Labour unions in protest. This Senate must take a stand to protect the interest of Nigerians. How can anyone increase the tariff when things are high? Why will a government agency do that? We need to be firm”, Bassey said.

    Senator Dino Melaye urged lawmakers to look beyond the suspension of the new tariff regime.

    He said there was need to call on electricity generation and distribution companies to pay back loans they obtained from the Federal Government to get meters for their customers.

    Malaye said: “This increase makes it the fourth time that electricity tariffs will be up after the privatisation of the power sector. Their excuse has always been that they want to improve on the electricity. There was a time that the government gave loans to distribution and generation companies to buy metres and give to customers. They are yet to pay back that loan.

    “We need to take a stand and mandate the government to reduce the tariffs. There was no negotiation with the Senate or the Labour. They arbitrarily increased the tariffs and expect us not to talk.”

    Saraki mandated the committees on Labour and Power to meet with agencies of government to find a lasting solution after public hearings on the matter.

    Saraki said: “NERC should forthwith suspend the implementation of the new tariff. I believe that when we have a public hearing, these issues will be addressed. Until then, the new regime stands suspended”.

     

  • Ding-dong over electricity tariff

    Ding-dong over electricity tariff

    Last week’s standoff between the electricity distribution companies and the Organised Labour over tariff hike has, in a manner of speaking, exhumed a corpse which both parties have suffered the illusion of laying to rest but which in fact remains ‘live’. One here talks of the farce that the post-Power Sector Reform Act 2005 has ushered in – a sector that is liberalised only in name. We may have come a long way from when the debate on the provision of the public was split along ideological lines; what we could not have bargained for is the motley assembly of anaemic rent collectors described as Discos under a so-called market environment.

    Eleven years after the institutional framework designed to usher in the regime of liberalisation is said to have kicked in, our old nightmare may have changed hands, the problems that dogged the ancien regime have magnified in geometric proportions – far beyond our wildest imagination. Some two and half years after the handover of the assets to the 14 privately-owned successor-companies of the Power Holdings Company of Nigeria (PHCN), it is increasingly clear that the sector, in the hands of the new owners, is headed nowhere.

    I have taken time to peruse the issues at the heart of the current dispute. I must confess that it was, initially, somewhat tempting to dismiss this latest agitation by labour as just of those things. To start with, I understand that labour, like any body of consumers would loathe any idea of a tariff hike no matter how justifiable. But even much more than that is my growing frustration with the group over what I consider as its fixations with old ways and means in a vastly changing world! I cite a ready example in the oil subsidy debate over which labour was needlessly obdurate even when it was so apparent that the subsidy burden had become an albatross too heavy a burden for the treasury to continue to bear.  I have never seen a more destructive fixation than that! One can therefore understand the basis of my initial irritation.

    This time around however, things are different. Labour is right. It’s time for the Discos – or whatever they are called – to sweat for their money. At this time, no one denies that the issue of tariff review has been on the table for so long; indeed, it is one of the key pillars of the power sector reform. Moreover, that is not what labour’s agitation is about.

    I must concede that the NLC President, Comrade Ayuba Wabba did a fantastic job of distilling the issues in his joint statement with his Trade Union Congress counterpart on their plan to picket the Discos last week. Among the many factors cited were: an alleged non-compliance with section 76 of the Power Sector Reform Act 2005 in effecting the increase; the lack of appreciable improvement in service delivery compounded by the non-compliance with the signed privatization Memorandum of Understanding (MOU) of November 1, 2013, which stipulates that within 18 months gestation period, all consumers are to be metered. There was also reference to an alleged disobedience of a subsisting Court Order by Justice Mohammed Idris of the Federal High Court, Ikoyi, Lagos, dated  May 28, 2015, prohibiting further increment until the determination of the substantive suit; and finally, that the timing of the increase aside negating the current economic realities would further impoverish Nigerians.

    Without question, the issues, as outlined by the labour leaders, aptly capture what has now become the unending regime of frustrations of the electricity consumer in the hands of the operators. Today, steady electricity remains a rarity. While it is bad enough that the massive investments promised by the new entities have failed materialise, or worse still, unimaginable that the sector is still looking up to the federal government to bail it out, it is outrageous to imagine a technology-driven sector like power insisting on doing things by the rule of the thumb in 2016! That, to me is the crux of the matter.

    Again, labour is a pain in the ass. Now, I am not even certain that I would endorse its methods 100 percent! But that is not the issue. What is at issue is a service provider insisting on reaping before turning the soil around! And now labour says NO! As far as winning the argument goes, I’ll give the moral advantage to our men on the agitation front as theirs has become a public duty imposed by the exigencies of the time in the event of the failure of the regulatory agencies to act in their defence.

    Where do we go from here? Honestly, it is difficult to answer. As flawed as the process of privatisation has turned out to be, going back on the process will certainly prove difficult if not impossible. Truth is – the feud over tariff obviously masks a more fundamental problem; it is in fact symptomatic of a deeper problem – which is the absence of capacity, both technical and managerial, by the current crop of players. As it appears, we are stuck in the middle of a deep sea with no rescue in sight!

    I guess the least we can do at this time is getting the different companies to live up to the obligations spelt out in their MOUs with the understanding that failure comes with hefty sanctions. Such options as possible force sale should not be ruled out. That should not prove difficult for the government.

    Finally, the federal government may want to sit back and ask itself if the business of liberalisation stops at parcelling out the power firms as against attracting the huge funds it claimed it could not afford into the sector. How about committing the investors into a clear roadmap with timelines? Why would the power companies insist on sucking the juice and asking the consumer to feed on the roughage? Is that what their liberalisation teach?