Court Bars NERC From Canceling Discos’ Licenses

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The Federal High Court Abuja on Friday restrained the Nigeria Electricity Regulatory Commission (NERC) from canceling the licenses of eight power Distribution Companies (DisCos) adjourning the matter till January 17 for consideration.

The Plaintiff in the suit, Registered Trustees of African Initiative Against Abuse of Office approached Federal High Court Abuja to restrain NERC and the relevant Distribution Companies from canceling the licenses of the Distribution companies.

According to them, the reason provided by NERC as a basis for issuance of Notice of Intention to Cancel License of the Discos are contractual issues between the Investors of the Discos and the Bureau of Public Enterprises which should not be used to punish electricity consumers.

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They argued that by virtue of Section 62 of the Electric Power Sector Act 2005, once the license of the relevant Discos are canceled, they will no longer have the capacity to provide electricity to their esteem customer and by law, it is a crime for them to continue electricity distribution once the license is canceled.

 

They contended that the issue of remittance of the tariff being a contractual issue in the Discos Performance Agreement with BPE should be dealt with according to the Agreement.

They argued that the issue of collection of tariffs and remittances to the market is one of the key obligations of the Core Investors of the Discos in the Performance Agreement they signed with BPE which also provides for consequences including the Core Investors losing their Investment to Federal Government of Nigeria.

It, therefore, means that where the Core Investors are in breach of their commitment to BPE on collection and remittances, they should be responsible for the consequences including losing their investments and NOT the Electricity Consumers being made to suffer the punishment exclusively.

It is their argument that revoking the license for infraction caused by the Core Investors will amount to punishing the electricity customers for the offence committed by the Core Investors because by Section 62 of EPSR Act 2005, once a licensee loses its license it can no longer have the capacity to distribute electricity.

Justice Ijoema Ojukwu, who presided over the matter adjourned to the 17th of January 2020 for hearing on the substantive matter to allow the respondents including NERC, Bureau of Public Enterprises and others present their own side of the argument.

Businessday