KEDCO initiates legal action against MAN over N5.3bn monthly revenue loss

The Kano Electricity Distribution Company (KEDCO) has taken legal action against the Manufacturers Association of Nigeria (MAN), citing significant monthly revenue losses totaling N5.3 billion due to a tariff dispute.

In a statement issued by Sani Bala Sani, Head of Corporate Communications at KEDCO, the company expressed its decision to pursue legal measures in response to MAN’s directive instructing its members not to comply with the newly approved Band A electricity tariff by the Nigerian Electricity Regulatory Commission (NERC), effective from April.

According to KEDCO, MAN’s actions have resulted in substantial financial setbacks, stating, “The Company has suffered a huge revenue loss of up to over 5.3 billion Naira per month.”

The company accused MAN of unlawful interference with its operations, despite being aware of the federal government’s removal of electricity subsidies for Band A customers, as well as fluctuations in economic indices such as exchange rates, gas prices, inflation, and other factors influencing electricity tariffs.

“These factors necessitated KEDCO’s adjustment of its tariff from N159.13 per kWh to N225.00 per kWh to reflect actual costs,” the statement read.

KEDCO alleged that MAN’s involvement included circulating directives through its Director General, Segun Ajayi-Kadir, advising members and other Band A customers to disregard the new tariff rate approved by the regulator and instead pay the old tariff rate on account.

This, according to KEDCO, has led Band A customers to default on their payment obligations under the new tariff structure.

The company emphasized that MAN’s actions unfairly shifted the financial burden of subsidy removal from the federal government onto KEDCO, affecting its ability to meet obligations to power generating companies under the cost-reflective tariff regime.

The legal action marks a significant development in the ongoing dispute between KEDCO and MAN over electricity tariffs, highlighting broader implications for tariff compliance and regulatory oversight in Nigeria’s energy sector.

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