Court strikes out MAN’s suit challenging electricity tariff hike in Nigeria
A Federal High Court in Lagos has dismissed a lawsuit filed by the Manufacturers Association of Nigeria (MAN) against the Abuja Electricity Distribution Company (AEDC) and eleven other distribution companies regarding an increase in electricity tariffs for Band A customers.
The court’s judgment was delivered on October 7, 2024, and it addressed several key issues raised by MAN.
MAN initiated legal action following a substantial increase in electricity tariffs for Band A customers, which rose from N66 to N225 per kilowatt-hour.
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This increase was implemented after the Nigerian Electricity Regulatory Commission (NERC) issued a Supplementary Order on April 3, 2024, followed by a revised rate on May 6, 2024. MAN argued that the regulatory procedures required for such tariff reviews were not adhered to and claimed that the burden of the tariff hike unfairly targeted only Band A consumers while excluding others.
Court’s findings
Upon reviewing the arguments presented by both parties, the court determined that MAN’s lawsuit constituted an abuse of judicial process. The court found that MAN’s case was premature as it had not exhausted available dispute resolution mechanisms before resorting to litigation.
The court also concluded that MAN’s claims did not disclose a reasonable cause of action because they failed to follow due process as outlined in Section 51 of the Electricity Act 2023.
Also, the suit was deemed improperly instituted as it did not comply with established legal protocols for addressing grievances related to tariff adjustments.
As a result of these findings, the court struck out MAN’s case, effectively dismissing their challenge against the electricity tariff hike.
The ruling represents a setback for manufacturers who have been vocal about how these increased tariffs significantly impact their production costs.
Band A customers are classified as premium consumers who do not receive government subsidies but are guaranteed at least 20 hours of electricity supply daily. However, with tariffs now reaching N209.50 per kilowatt-hour, manufacturers have expressed concerns over rising operational expenses.
A statement by the Nigerian Electricity Regulatory Commission on Thursday stated that it had objected to the suit by MAN.
