TCN reconnects Kano, Kaduna, part of Abia to national grid after 12-days outages, as FG offers 60 day grace period

Oredola Adeola

Some parts of Abia State, Kaduna, and Kano have been reconnected to the national power grid after almost two weeks of being disconnected by the Transmission Company of Nigeria (TCN) over the failure of three electricity Distribution Companies (DisCos) controlling the affected states to provide the required Bank Guarantees for the remittance of bills for ancillary services.

Engr. Eddy Eje, Executive Director, Market Operator (Independent System Operator) made this known in a statement released on Sunday, announcing the reconnection of the affected states, following the Nigerian Government’s intervention leading to a 60-day extension of the disconnection notice from May 1, 2022.

EnergyDay gathered that the Market Operator and TCN in a strict application of Nigerian Electricity Supply Industry (NESI), market rules suspended APLE Electric Limited, Kano, and Kaduna Electricity Distribution Companies for breach of the procedures of the rules.

The Market Operator, while acting in accordance with procedures to ensure that non-compliant participants(DisCos in this case) are held accountable for their actions, disconnected the supply to the affected states.

However, the Market Operator revealed that  Engr Abubakar Aliyu, in consideration of the collateral consequences on the paying Disco customers, appealed for the reconnection of the suspended & disconnected defaulting DisCos to the national grid after pleading for the extension of the grace period to 60 days from April 31, 2023.

Engr. Eje, therefore charged other defaulting DisCos and market defaulters that have been served a suspension order to comply with the provisions of the market rules.

He also encouraged them to take advantage of the 60-days extension window to settle the payment of their outstanding invoices, posting of adequate Bank Guarantees (BG), and forward their active power purchase agreements (PPA) -as the case may be- to the Market Operator/TCN.

Eje said, “It should be noted that other defaulters who are yet to be suspended/disconnected should cure their defaults within these sixty (60) days. At the expiration of this grace period, the Market Operator will resume sanctions in line with the market rules.

The ED Market Operator also mentioned that MO and TCN applauded the intervention of the Minister of Power, thereby urging the erring Discos to seize this opportunity to fix their defaults.

HOW THE DISCOS WERE SUSPENDED

EnergyDay gathered that Aba Power Electric Limited (APL Electric Limited) a subsidiary of Geometric Power Company, in charge of power distribution to the Aba ring-fenced area, in Abia state was disconnected from the national grid on April 20, 2023, in line with the market rules.

The firm is a pioneer private sector licensee of the Nigerian Electricity Regulatory Commission, NERC, operating in Abia State.

MO/TCN in a statement released by Ndidi Mbah, General Manager, TCN, Public Affairs, disclosed that the order resulted in the disconnection of the feeders within the APLE franchise area until such a time that they provide the required bank guarantee and settle their outstanding invoices with the Market Operator.

According to her, APL Electric Limited was found to be in non-compliance with the Market Rules for not having adequate Bank Guaranty and for incomplete payments of APLE’s Market Operator’s invoices for September 2022 to February 2023.

Mbah claimed that the Market Operator first sent a request for a Bank Guarantee to APLE Ltd on November 29, 2022, adding that the company failed to provide the required Bank guarantee.

She said, “Consequently, a notice of an event of default was issued to APLE Ltd on December 7, 2022, for incomplete payment of issued invoices, after which a Notice of Intent to Issue a Suspension Order was issued on December 14, 2022.

“Based on the Market Rules, APLE requested for a Hearing which was held online on the 20th of December 2022, where APLE was given an opportunity to show just cause why it should not be issued a Suspended/Disconnected Order.

“After the hearing, a 14-business day notice was issued on March 21, 2023 in three (3) national daily newspapers (Daily Trust, Guardian & Thisday newspapers), as required by the Market Rules. Thereafter, a Suspension Order was issued on April 19, 2023, which required APLE to cure its defaults.

On the disconnection of Kaduna and Kano Electricity Distribution Companies, Mbah disclosed that the two DisCo were equally found to be in non-compliance with the Market Rules for not having adequate Bank Guarantees and for incomplete payments of their Market Operator’s invoices for the time-line January 2020 to February 2023.

Mbah said, both DisCos were sent a request for their Bank Guarantees in line with the Market Rules, on February 16, 2022, adding that they failed to provide the required facility, and were served a Notice of Event of Default on March 2, 2022, for incomplete payment of invoices.

She said, “This was followed by a Notice of Intent to Issue a Suspension Order, issued on May 9, 2022. Both DisCos requested hearings which were held on May 31, 2022 (KEDCO) and June 2, 2022 (KAEDCO), where both DisCos were given an opportunity to show just cause not to be suspended/disconnected.

“After the hearing, a 14-business day notice was issued on March 21, 2023, in three (3) national daily newspapers (Daily Trust, Guardian & ThisDay newspapers), as required by the Market Rules. Thereafter, a Suspension Order was issued on April 20, 2023, which required KAEDCO and KEDCO to cure their defaults,” the TCN spokesperson said.

Mbah therefore, emphasised that the disconnection Order was then carried out on April 26, 2023, in line with the Market Rules, which resulted in the disconnection of the major Feeders within the franchise areas of both KAEDCO and KEDCO, until such a time that they provide the required bank guarantees and settle their outstanding invoices with the Market Operator.

DEFAULTING MARKET PARTICIPANTS – 9 DISCOS, 2 GENCOS

EnergyDay gathered that the Market Operators’ defaulters as of March 2023 comprise nine DisCos, Ajaokuta Steel Company (ASC), a special electricity customer; nine DisCos – AEDC, BEDC, EEDC, IBEDC, Ikeja Electric, JEDC, Kaduna Electric, KEDC, PHEDC, APL Electric Company Aba.

The GenCos – Niger Delta Power Holding Company (NDPHC) plants and Paras Energy.

The nine DisCos supply electricity to over 70 percent of the over 12 million registered electricity consumers while the GenCos generate significant power on the grid with NDPHC having at least seven active GenCos.

While some of the defaulting DisCos have been given a notice of intention to suspend them and thirdly are given the opportunity to respond.