Darkness looms as TCN moves to disconnect defaulting DisCos, GenCos
Nigeria could be thrown into darkness in the coming days as the Transmission Company of Nigeria (TCN), yesterday, said some distribution companies are at the verge of being disconnected over failure to comply with market rules.
Coming barely a few days after the generation companies threatened to down tools, the government-owned TCN, in a statement in Abuja, said guidelines governing the Nigeria Electricity Supply Industry (NESI), otherwise known as market rules, are being flouted by operators.
Last month, in an order (TCN/ISO/MO/2023/001), the Nigerian Electricity Market (NEM) – TCN’s arm, in charge of market operations – accused the DisCos of non-compliance with Conditions of Market Rules and Market Participation Agreements, which mostly border on remittances of payment for ancillary electricity services.
Privatised in 2013, the distribution companies are the revenue arms of the electricity industry in Nigeria. The intake from the firms funds the operations of TCN, Nigerian Electricity Regulatory Commission and The Nigerian Bulk Electricity Trading (NBET) Plc, which in turn settles invoices from the GenCos and others, like gas suppliers and transporters.
In 2019, there was a similar situation, where TCN disconnected Port Harcourt, Kano and other DisCos over lack of compliance with market rules.
In the order issued, last month, the market operator named the defaulting Market Participants (MPs) as comprising nine DisCos, three GenCos and Ajaokuta Steel Company, a special electricity end-user/customer.
Head of Market Operation at TCN, Edmund Eje, said the rules governing the market are absolutely necessary for viability and sustainability of the sector.
He said: “These rules are sacrosanct and must be complied with by all existing or new players in the sector. Essentially, the players in the power sector are the generation, transmission and distribution companies. For all the players to interact effectively and create requisite harmony for growth, efficiency, profitability and of course, continued sustenance of the sector, the rules set for governance and regulation of relationship among all in the sector must be obeyed and upheld.
“NESI’s market indiscipline is one of the major factors dealing a disastrous blow to the scalability and growth of the market. All participants sign the market Participation Agreement. But to comply is usually an uphill task for many. If the rules of every game are observed, there would be no need for sanctions.”
He said TCN is embarking on sanctioning of erring market participants, having given them notices and time to comply with the rules.
Eje said one of the fallouts of the sanctions would be partial or complete disconnection of defaulters from their point of connection to the grid.