Illegality Of The Proposed Electricity Tariff By Femi Falana

Femi Falana

By Femi Falana

We are Solicitors to the National Conscience Party (hereinafter referred to as “our client”) on whose behalf we write this letter to the Federal Government through your Commission.
 


Our client has instructed us to challenge the decision of the Federal Government to increase electricity tariff with effect from June 1, 2012 at a time that the Nigerian people are witnessing the near collapse of electricity supply in the country.  In justifying the decision you were reported to have said that it is designed to attract investors who would not venture into the business “unless there is a profitable and sustainable tariff regime”.
 


With respect, your reliance on the provisions of the Electric Power Sector Reform Act 2005 to justify the proposed increase is totally misleading as the Nigerian Electricity Regulatory Commission is only empowered by Section 76(2) of the Act to regulate the prices of tariff to allow “a licensee that operates efficiently to recover the full costs of its business activities, including a reasonable return on the capital invested in the business”. In other words, there is no provision in the law that empowers the Commission to increase electricity tariff in anticipation of investment in the electricity sector.

To that extent, the proposed increase in electricity tariff is illegal in every material particular.
 
However, in order to cushion the adverse effect of the new tariff regime on the poor segment of the population the Federal Government was reported to have earmarked a  subsidy of N50 billion in the 2012 Appropriation Act. Although the Senate has expressed concern over the new tariff regime, it ought to be pointed out that it is legally untenable in as much as no bill for the increase has been submitted to the National Assembly for passage into law as stipulated by Section 59(1)(b) of the Constitution which provides that there shall be a money bill “for the imposition of or increase in any tax, duty or fee or any reduction, withdrawal or cancellation thereof”.

In the case of Attorney-General of Bendel State v. Attorney-General of the Federation (1982) 3 NCLR 1 at 64, Chukwuneike Idigbe JSC of blessed memory held inter alia:
 
“In my view, a bill for the payment, issue or withdrawal from the Consolidated Revenue Fund or any other public fund of the federation (such as the Federation Account under section 149 of this Constitution) of any money thereon, or any alteration in the account of such payment, issue or withdrawal is money bill; and so also is a bill for the imposition of or increase in any tax, duty or fee or any reduction, withdrawal or cancellation thereof (see section 55(1)(a); and the revenue allocation bill is a money-bill”.
 
Since Section 55(1) of the 1979 Constitution is in pari materia with Section 59(1) of the 1999 Constitution, you will agree with us that the proposed increase in electricity tariff which has not been passed into law by the National Assembly is unconstitutional and illegal.

We are therefore compelled to urge the Federal Government to drop the proposed tariff increase and recover the bulk of the $16 billion alleged to have been wasted on the comatose energy sector by the Federal Government under the Olusegun Obasanjo Administration.


 
In your book on Privatization & Public Good: The rule of Law Challenge published in 2008 you had forcefully argued that “the failure of privatization in Nigeria in the context of rule of law relates to lack of adequate institutional preparation before beginning with privatization. Again, privatization should be implemented in a manner that promotes the rights of the people and strengthen social and economic institutions so that the greatest public value can be produced at the least cost. Nigerian privatization exercise did not proceed in such orderly and right respecting manner. This failure has produced negative result for the economy and the welfare and rights of the people.”
 


No doubt, the gross mismanagement of the economy by the neo-colonial ruling class has since aggravated poverty in the country to the extent that not less than 112 million people out of a population of 167 million people now live on less than $2 a day. 

In the circumstances, you will agree with us that the proposed increase in electricity tariff is going to further pauperize the masses of our people. Convinced that the Nigerian people are going to revolt against the immoral and illegal policy President Goodluck Jonathan has directed your Commission to embark on a nationwide consultation on the matter. For reasons best known to your Commission no step has been taken to carry out the presidential directive.
 


TAKE NOTICE that if you fail to announce the cancellation of the proposed increase in electricity tariff within seven days of the receipt of this letter we shall not hesitate to initiate legal proceedings at the Federal High Court with a view to preventing your Commission from engaging in the brazen violation of the provisions of Section 59(1) of the Constitution and Section 76(2) of the Power Sector Reform Act 2005.
 
Yours sincerely,
 
 
FEMI FALANA