With 33 active cases in different courts in the country, the Nigerian Electricity Regulatory Commission (NERC) is the most sued regulator in Nigeria, spending more time handling briefs than writing regulations. This is excluding suits market participants instituted against government and customers against operators, ensuring that operators waste valuable time and resources on legal disputes.
The electricity sector regulator in its third quarter report said the current cases relate to ‘illegal’ disconnection by DisCos, wrong customers’ classification, land trespass, suspension of Ibadan DisCo Board, granting of Eligible Customer status, among many others.
Nigeria has a plethora of regulatory agencies, from the Central Bank of Nigeria playing an overarching role in the financial sector to Nigerian Film, Video and Censors Board in the entertainment industry, but no other regulatory agency is sued with the same enthusiasm as market participants in the power sector sue their regulator.
Nigeria’s power generation companies (GenCos) and electricity distribution companies (DisCos) have become clever at creating reasons to sue their regulator than actually generating and distributing power which are their remit.
This leads to waste of valuable time and resources deployed in fighting fires rather than fixing issues. It also bogs down the sector as progressive regulations wait upon endless litigations. The snail pace at which litigations proceed in Nigeria provides a sanctuary for the unwilling.
Analysts attribute the rising spate of ligations in the sector to the long period the commission was without a head which seemed to have weakened it, as well as its perceived lack of independence from government which further emboldens operators to take shots at it.
“What led to this was the gap we had of almost 18 months of no strong commission that gradually led to a weakening of the commission,” said Dolapo Kukoyi, partner at Detail Commercial Solicitors, heading the power practice of the Lagos-based law firm.
When the tenure of Sam Amadi, erstwhile chairman of NERC, and its commissioners ended on December 21, 2015, the commission operated without a head till April 2018 when lawmakers confirmed James Momoh as acting chairman. Anthony Akah was acting chief executive for some months, a position unrecognised by law. Prior to this, in February 2017, Babatunde Fashola, minister of Power, Works and Housing, had appointed commissioners for NERC.
“When you are in a market and there are a lot of uncertainties, as an investor, you have to look to other sources of recourse if you can’t trust your regulator,” said Kukoyi.
Caleb Adebayo, energy lawyer at Templars, a Lagos-based law firm, said the rising spate of ligations shows that consumers have become more aware of their rights and are motivated enough to show displeasure.
“What this essentially speaks to is that NERC has to be more proactive in regulating the sector,” said Adebayo.
NERC as regulator has often been accused of allowing the tail wag the dog. When DisCos began to flout market rules by keeping more revenue generated in the market than they should, the regulator failed to discipline them. This emboldened them and bred further rascalities, including ‘crazy electricity billings’, rejecting power, denying customers of meters, and instituting frivolous lawsuits against NERC.
For example, DisCos sued NERC as soon as the Eligible Customer regulation, which would take care of power they routinely reject, was created. GenCos cried to the court to stop the Federal Government and NERC from paying Azura Edo IPP from N701 billion intervention fund government created without recourse to them. Worse still, DisCos sued NERC asking for their own intervention even though their woeful collection record necessitated the intervention in the first place.
As operators whimper like over-pampered children, lawyers are emerging the biggest winners in the sorry pass Nigeria’s power sector has become, earning fat fees while customers marinate in darkness with average electricity consumption per capita of 129 kWh or the equivalent of a light bulb burning for most of a day, according to one expert.
Some of the cases against the regulator involve customers suing it for failure to call operators to order. Several other suits including class actions have been filed by consumers tired of paying for darkness.
There are also suits instituted by activists inspired by a brand of righteous indignation starved of reason. In May 2015, Toluwani Adebiyi, a Lagos-based lawyer and activist, sued NERC and got a judgment barring the commission from increasing electricity tariff until every household in the country enjoys at least 18 hours of uninterrupted power supply on a daily basis. This judgment contributed in impairing the ability of DisCos to charge cost-reflective tariff.
NERC has 25 forum offices in 24 states to adjudicate on consumers’ complaints that are not adequately resolved by the responsible DisCos but, by its own admission, it is not doing a good job.
“During the third quarter of 2018, the Forum Offices received one thousand, nine hundred and fifty-nine (1,959) complaints from customers who were unsatisfied with DisCos’ decisions. Out of the complaints…about 43 percent were resolved (with or without a hearing) as against 37 percent of the complaints resolved during the second quarter of 2018,” NERC said in its report.
ISAAC ANYAOGU
