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Unsettled Debts: TCN Takes Action Against Defaulting Operators, Gives 14-day Ultimatum
The Transmission Company of Nigeria (TCN) has given Ikeja, Abuja, seven other electricity distribution companies (DisCos), APL Electric Company Aba, Niger Delta Power Holding Company (NDPHC) plants, as well as Paras Energy, and the Ajaokuta Steel Company, a 14-day deadline to balance their remittances and other deficits to the Market Operator, an arm of the TCN.
Eddy Eje, Executive Director, Market Operator (Independent System Operator), made this known in an order No: TCN/ISO/MO/2023/001, dated Monday, March 20, 2023, signed and addressed to the defaulting Market Participants (MPs) for their non-compliance with the Market Rules and Market Participation Agreements, as seen by EnergyDay on Wednesday.
MO is a TCN subsidy responsible for the processing of monthly settlements, comprising energy bought and traded between Discos, Gencos, and IPPs, Transmission Usage charges, and other services.
Subsequent investigation revealed that the other defaulting MPs are DisCos, including Benin DisCo, Enugu DisCo, Ibadan DisCo, Jos DisCo, Kaduna Electric, Kano DisCo, and Port Harcourt DisCo.
Being a particular electricity end-user/customer, Ajaokuta Steel Company is obligated to the market.
According to Eje, the ruling was in accordance with the terms of the Market Rule, and the MO had given all MPs 14 working days to thoroughly repair their breaches or risk full market penalties.
He also said that if the defaults by the 13 companies are not resolved within the time frame specified, the MO may issue a suspension order to prevent the defaulters from participating in the electrical market.
“The defaulting Market Participants (MPs) were formally notified of the default of their MPA and the Market Rules (MR) and also citing sections: 17.1.d and 45.3–7, dealing with remedial actions and sanctions.
“The MPs may want to note that if an Event of Default is not remedied within the time specified in the Default Notice or within a such longer period as may be agreed by the Market Operator, the Market Operator may issue the transmitters and distributors to whose systems the Participant is connected, a notice indicating its intention to issue.
”A suspension order to the participant, suspending or restricting all or any of the Participant’s rights to participate in the Market Operator Administered Market; and a disconnection order to TSP or any other Transmitter, or distributor to whose transmission system or distribution system the participant is connected, directing the disconnection of the relevant facilities or equipment of the suspended participant, ” the MO ED said.
The ED ISO, on the other hand, stressed that the Market violations perpetrated by these MPs endanger the operations and sustainability of all Service Providers in the Nigerian Electricity Market, including the Regulator.
Eje warned that, in accordance with the Market Regulators’ provisions, the MO hereby grants a grace period of 14 working days from the date of this publication for all MPs to fully remedy their MPA/MR breach with respect to clause 3.3. (iii) of the MPA or face full Market Sanction in accordance with the MR.
He emphasized that the MO is committed to NEM stability and sustainability and that the failure of service providers will lead to market failure, warning all MPs to follow market ruling documents.