legal issues of the electric power sector in nigeria

The starting point of this further explanation is to inform us that Electricity business being the kind of public business that it is in Nigeria and the world over – needed by and depended upon by all; individuals, companies, the entire economy, the army, the Police, etc. etc. so much so that without it not much can be done to keep the society and the economy moving at any level near what modern technology dictates, demands and provides - special recognition is given the land need of the Electric Power Sector. The provisions of Section 77 of the Electricity Sector Reform Act, the public importance of electricity services made it that if any licensee in the sector requires land all it/he needs to do is to apply to the Commission that needs the particular land for its/his business operations. After the Commission, usually working in tandem with the State Ministry of Lands (and Surveys), is satisfied that the land is required for the discharge of obligations under the license, will declare that the land is required for such, and which purpose is regarded as being for public purpose. The Commission makes an application on behalf of the Licensee to the President who in turn publishes a Notice of that land need in the Federal Government Gazette, and serves the Governor that the specified land is required for a ‘public purpose’ in the electric power sector. The Governor then exercises his powers under section 28 of the Land Use Act to revoke all existing rights over the land and allocates same to the particular Licensee that needs it.

No, he will have to return the land to the former owner from whom the land was taken.

It is true to say that the 1978 introduction of the Land Use Act, Cap L5, LFN (2004) (LUA) been of immense help to businesses like those of the Electricity energy sector as it seemingly took ownership of land away from the traditional owners and vests same in the Governor of each of the States in Nigeria to hold entrust for the entire people of the State. At some point in the process of application of the LUA, the Supreme Court of Nigeria in the case of Nkwocha V. The Governor of Anambra State (1984) SCNLR 634 held that true ownership of land by the traditional individual owners had become a thing of the past as they are left only with mere “right of occupancy” while the right of ownership got vested only in the Governors. This position, of course, was, not long after, better explained, if you like, by the same Apex Court in Salami V. Oke (1987) 4 NWLR (Pt. 63) 1, that that “mere right of occupancy” actually means almost everything that land ownership offers, being that it constitutes legally recognizable possessory (and ‘ownership’) rights in and over land.

All the Operators now need to do, unlike in the pre-LUA era when they will be at the mercy of several individuals they would need to negotiate and acquires right of access and use from, will be to go through the Commission (NERC), fulfil the Constitutional requirements, after which an application is made to the office of the President through whose’ gazette publication the Governor is directed to compulsorily acquire the particular, and same gets allocated to the Licensee to have right of access and occupancy. The Governor exercises his powers flowing from section 28 of the Land Use Act to compulsorily acquire the land and allocate same to the Electricity Energy Operator for their businesses that are seen as being for ‘public purpose’ or ‘overriding public interests’. A fuller and better explanation of the relevant laws will follow hereunder.

No, it is not that the land will be taken by force or for nothing. The revocation of his rights and allocation to the Licensee must still be done as to meet the requirements in Section 44 of the Constitution of the Federal Republic of Nigeria, 1999 (as amended) whereby he will be notified that the land is needed for overriding public interests and given the opportunity to be part of the assessment of the unexhausted developments in the land and of economic crops and trees; Section 28, 29 and 44 of the LUA which are about meeting the requirement of public purpose, being properly notified of the President’s intention of declaring the land needed for overriding public interest in the Gazette, after which the Governor of the State will issue a Notice of Revocation of the existing rights over the particular land for public purpose. The value of compensation would be properly assessed, with the owner of the land being involved in that exercise, and he must be properly informed of his right to defer and challenged the assessed value in court or tribunal. The payment of due compensation must be done promptly, and before the Licensee enters to take over. Any failure to meet and satisfy the requirements of these sections of CFRN, 1999 and the LUA will mean that the effort of taken that land from the owner to give same to an electricity licensee would be held by our courts to have failed notwithstanding that it is touted to be for overriding public interest. See Osho V. Foreign Finance Corp. (1991) 4 NWLR (Pt. 184) 157; Ibrahim v. Mohammed (2003) 6 NWLR (Pt. 817) 86; Orianzi V. A. G. Rivers State (2017) LPELR - 41737Section 77(1) – (10) of EPSRA.

The Licensee would not just return or hand over the land back to the former rights owner who had received the consideration in the form of compensation. He will offer the land back to that former rights’ holder over the land to repurchase same with an amount equivalent to the sum of money paid to him as compensation for the loss of the land by the Licensee. The said former rights’ owner is said to have a right of First Refusal. If he refuses or is unable to so repurchase the land and take back the land, the Licensee may offer the land to any other interested fellow on terms and conditions as may be directed by the Commission. Section 77(11) of the ESRA

Going by the mandatory nature of the wordings of subsection (9) of S. 77 of ESRA saying that the Governor “SHALL, in accordance with the provisions of section 28(4) of the Land Use Act, revoke the existing right of occupancy respecting the land and grant of certificate of occupancy in favour of the concerned licensee in respect of the land identified by the Commission…” together with the compelling words of section 28(4) of the Land Use Act, it does not appear to be that the Governor would have the choice of refusal available to in him in law on the matter. He has to do it.

It is not quite so. The Generating, Transmission and Distribution companies are profit-making business for their owners, no doubt. But because of the critical nature of the need of electricity by all and sundry, smooth driving of the Sector is loosely considered to be for the good of all. What happens is that, yes, Government and its agencies step in to facilitate their getting needed land for their operation because of how matters of the Sector affects all, but it is made to be that the former owner of right of occupancy is fairly negotiated with and well treated, and made to be paid a commercial, market-forces- determine amount, much like commercial purchase price, as compensation value for his land

The subject of Electricity regulation is listed as item No. 13 in the Second Schedule to the Concurrent Legislative List which is open to both Federal and State Assemblies to legislate. It therefore follows that issues and matters relating to electricity generation, transmission and distribution are under State High Courts’ jurisdiction, not the Federal High Court as some had mistakenly believed

No. The FHC becomes the right forum to go to where the statutory powers and functions (not contract or employment issues) of a Federal Ministry, Department or Agency is involved such as NERC, Nigerian Electricity Management Services Agency (NEMSA) established under this ESPRA are involved.

There are situations and circumstances under which it will lawful for a Disco to disconnect a customer. According to the NERC’s policy published vide the Federal Republic of Nigeria official Gazette No. 103, titled Connection and Disconnection Procedures for Electricity Services 2007, published under the Electric Power Sector Reform Act No. 6 of 2005, a Disco can disconnect a customer if:

(c)Due to an act or omission of a customer, a meter located in his premises is inaccessible to be read for a period of three consecutive bills: Provided that the Disco

i. Informs the Customer by written notice or telephone contact of the inaccessibility of the meter and requests him to provide access arrangement and he fails to do so,

ii. Gives the Customer a written warning that unless he provides access by a given date (which shall not be less than 10 working days to enable the Customer provide reasonable access arrangement) electricity supply to the Customer shall be disconnected.

As it is known that there is a particular other agent responsible for the provision and installation of meters, the Meter Asset Providers (MAP) under the Meter Asset Providers Regulations 2018 (Regulation NERC –R112) it is always thought by many that the Discos have no responsibility in that regards. The High Court of Ondo State in the unreported case of Mike Kpemi V. Benin Electricity Distribution Company Plc, relying on the interpretation given sections 63 and 67 of EPSR Act by the Court of Appeal in the of Jos Disco V. John (2018) LPELR – 46395 that showed the Disco therein to have the statutory duty of connecting and supplying electric power to customers, the Court held that it (the Disco) also had the obligation of the meeting metering needs of its customers.

It is really not very certain whether because of the fact that it is the Discos that are always out there for the customers and the public to see and relate with, (and may be, by some faults of the Discos, everything associated with electricity from generation to transmission and distribution is associated with only the Discos), it is not right that in spite of the clear dictates of the provisions of the relevant laws and Regulations every function in the electricity supply chain must be attributed to the Discos.

It is our strongly held view that the Sections 63, 67 and other Sections of the EPSR Act that saddles the Discos with some functions should be read together with other sections that allocate some other specific functions to other parts of the electricity supply Chain. To have the MAPs with the specific function of providing, installing, inspecting and maintaining the meters and still insist that it is the responsibility of the Discos to meet the metering needs of electricity consumers appears to be neither fair nor legally sound.

No. The Commission, before it takes the step of declaring the land required for electricity business operation must first thoroughly investigate the demand of the licensee to be sure that the land is required, stricti juris, for electricity business operation. The Commission would also not take any action on the request of the licensee except it satisfies itself that the existing holder of rights of the land has been given adequate and fair opportunity to make representations against the declaration for any reasons, obviously ranging from what the land is presently being used, assessment of crops, economic trees and developments that are in the land for which compensation will be paid, etc. etc. See Section 77(3) & (4) of the ESRA.

Sections 78and 79 of the ESRA make references to these type of conflicting requirements and usage of land. Quite intriguingly, the needs and requirements of electricity business operating licensee are made, by subsection (3) of Section 78 of ESRA to trump them all – every other need is like made to bow to the need of the electricity operation licensee. Any existing limitations enacted in favour of the other lines of businesses listed in this question are nullified in favour of the electricity operations licensee. Subsection (2) of Section 78 of ESRA actually imposes on the authorities of other businesses that necessitate the use of conduit, sewers, etc. etc. the duty to take care and carry on in such a way that electricity operations by licensees are protected.

The issue of supplying electricity to a customer who is willing, ready and able to meet the requirements of having his premises connected to the National grid of electricity is not a privilege but a right to the customer and a duty to the Disco. By the provisions of Sections 63 and 67 of the EPSRA the Discos are under statutory obligation to connect and supply electricity to willing customers. Their (the Discos’) services are needed and depended upon (almost with no easy and feasible alternative) by the entire public in all facets of life, and so are heavily supported by the public Commission that the NERC is, even with the statutory rights afforded them to benefit from our public assets such as land, and so are seen as rendering not merely for-profit business but public service to the general populace as was emphasized by the Court of Appeal in the case of JOS ELECTRICITY DISTRIBUTION COMPANY V. JOHN (2018) LPELR – 46395. So, by sections 63 and 67 it can be seen that the Discos are under statutory duty and obligation to connect customers for the purpose of having electricity supplied to their premises subject to the terms and conditions as set by the Commission.

As the Discos are considered to be public interest bodies under statutory duty to connect and supply electric power to the citizens, their services not seen as some contractual transactions, the relationship between the Discos and their customers would qualify as fit to be secured by the relief of Order of Mandamus which is usually employed to secure the performance of a public/statutory duty, as was indeed ordered by the Court of Appeal in the Jos Disco v. John’s case (supra).

But quite frankly, there is no reason a normal Court Judgment Order directing a Disco to connect or reconnect any customer should not suffice. It is important that we mention it here that Dr. Yemi Oke, the erudite scholar and publisher of the most comprehensive book on electricity law in Nigeria yet – Nigerian Electricity Law & Practice (from which we drew much support and assistance in compiling this Digest on the subject), had opined that the use of Order of Mandamus by the Court of Appeal to compel the doing of a thing by a Disco, an institution he believes to be a private profit-making outfit, was done in error as that kind of order could only be properly used upon a public institution.

We beg to disagree with the great author, Dr. Yemi Oke on this. Even as, by incorporation and ownership structure it can be said that the Discos are private business outfits, nevertheless, it can hardly be denied that by their history of emergence, the nature of the takeover of the national public monopoly that NEPA was, an institution it will be right to say that every Nigerian had a stake in, on terms and conditions not exactly dictated by market forces or commercial pricing methods; the total helpless dependence of the entirety of the Government, the people and the economy of Nigeria on them; the support they are given by the Government, even with the Tax payers money, the involvement of Government in laying at their feet such natural asset as Land wherever they need it under the acceptance that the services they render qualify to be regarded as being for overriding public interest the statutory nature of the duties imposed on them by sections 63 and 67 of EPSRA as well as the overriding status of their land requirement above every other need as provided in Sections 77, 78 and 79 of EPSRA - are enough reasons to support the decision of Court of Appeal in Jos Disco V. John (supra) that the Discos are a type of Public Institutions.