Daily Independent (Lagos)
Adeola Yusuf
17 November 2008
Lagos — Lagos State on Monday took the Power Holding Company of Nigeria Limited (PHCN) to the tribunal set up by the Nigerian Electricity Regulatory Commission (NERC), in the dispute over the deduction of N12 billion from the state's allocation.
The State Government asked the tribunal, headed by Ransom Owan, to declare as illegal the deduction of N255 million monthly from its allocation by the Federal Ministry of Finance, and to order the PHCN to refund N12 billion deducted.
Lagos had signed a power purchase agreement with the National Electricity Power Authority (NEPA), now the PHCN to augment its Independent Power Project (IPP).
In court, the state's Attorney General and Commissioner for Justice, Olasupo Sasore, argued that the respondents breached the agreement dated 30 June, 2000 "to pay to NEPA, 21.15 per cent of the amount due from, or invoiced to NEPA as 'capacity payments' under the BPPA."
He recounted that the state government instructed the Federal Ministry of Finance on November 14, 2000 to effect a direct debit of its allocations from the Federation Account for the amount due, as its contribution in fulfilment of the agreement, but this deduction has continued while the PHCN has failed to fulfill its side of the deal.
"We now seek stoppage of the deductions and reimbursement of all amounts previously deducted, and have now filed this petition before the Commission," he said.
But counsel to the PHCN, Juliana Utulu, argued in a counter affidavit that the NERC lacks jurisdiction to hear the case.
Quoting paragraph nine of the agreement, she maintained that all "dispute shall be finally settled by binding arbitration, which the NERC that was established years after the agreement was signed could not represent."
Owan said it may take time but every one would be given a fair hearing and judgment.
He adjourned the case to December 16.
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