Unsettled debts: TCN issues 14-day ultimatum to defaulting MPs, sets to disconnect 9 DisCos, 3 IPPs, Ajaokuta steel

Oredola Adeola

The Transmission Company of Nigeria (TCN) has issued a 14-day ultimatum to Ikeja, Abuja, seven other electricity distribution companies (DisCos), APL Electric Company Aba, Niger Delta Power Holding Company (NDPHC) plants, and Paras Energy and the Ajaokuta Steel Company to balance up their remittances and other deficits to the Market Operator, an arm of the TCN.

Engr. Dr. 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 Conditions of Market Rules and Market Participation Agreements, seen by EnergyDay on Wednesday.

EnergyDay confirmed that MO is a subsidy of the TCN responsible for the processing of monthly settlement, including energy bought and sold between Discos, Gencos and IPPs, Transmission Usage charges, and other services.

Further checks showed that the other defaulting MPs are DisCos are Benin DisCo, Enugu DisCo, Ibadan DisCo, Jos DisCo, Kaduna Electric, Kano DisCo and Port Harcourt DisCo.

Ajaokuta Steel Company, is indebted to the market, as a special electricity end-user/customer.

According to Engr Eje, the order was in line with the provisions of the Market Rule, adding that the MO had given a grace of 14 working days within which all MPs must fully remedy their breaches or face full market sanction.

He further noted that if after the timeline given and the defaults by the 13 companies are not remedied, the MO could issue a suspension order to cut off the defaulters from participating in the electricity market.

The ED also mentioned that the MO will – after the expiration of the ultimatum- also issue a disconnection order to cut off the power supply from TCN to the MPs.

Engr. Eje also said, “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 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 noted.

The ED ISO however emphasised that the Market infractions committed by these MPs is threatening the operations and sustenance of all the Service Providers in the Nigerian Electricity Market, including the Regulator.

Dr. Eje warned that in line with the provisions of the Market Regulators, the MO hereby gives a graceful timeline of 14 working days from the date of this publication, within which all MPs must fully remedy their MPA/MR breach with respect to clause 3.3.(iii) of the MPA or face full Market Sanction in line with the MR.

He emphasised that the MO is committed to NEM stability and sustenance, the failure of the service providers will precipitate to market failure, warning all MPs to be guided by the market ruling documents and agreements they have committed to.