The electricity sector Market Operator (MO) of the Transmission Company of Nigeria (TCN), on Tuesday, expressed disappointment with the attitude of some industry participants and has threatened to activate partial or total disconnection of those of them defaulting in the industry.
The market operator which is a division of the TCN issues market settlements and invoices due to the market participants and service providers in the Nigerian Electricity Supply Industry (NESI).
TCN licence empowers it to manage the market operator and the system operator, which is responsible for the wheeling of electricity from generation to electricity distribution companies.
According to a statement signed in Abuja, by the MO, Dr. Edmund Eje, claimed that many of the challenges facing the industry are as a result of indiscipline, which has affected the growth of the sector negatively.
The power supply industry was governed by rules which it said were absolutely necessary for the viability and sustainability of the sector, stated.
“As such, these rules are sacrosanct and must be complied with by all existing or new players in the sector,” Eje stated.
He stated that for all the players to interact effectively and create the requisite harmony for growth, efficiency, profitability and continued sustenance of the sector, the rules set for governance and regulation of relationships in the sector must be obeyed and upheld.
“Some of these rules are domiciled with the market operator. Today, adherence to the market rules are below expectation,” he pointed out.
“NESI market indiscipline is one of the major factors dealing a disastrous blow to the scalability and growth of the market. Market Participation Agreement (MPA) is signed by all participants, but complying with them is usually an uphill task for many.
“If the rules of every game are observed, there would be no need for sanctions, he said. Currently, the market operator –TCN, is embarking on sanctioning erring market participants, having given them notices and time to comply with the market rules.
He stated that one of the fallouts of the sanctions will be the partial or complete disconnection of defaulters from their point of connection to the grid, adding that it is natural that some of the sanctioned players may attempt to politicise the action to score cheap points and whip up unnecessary sentiments.
He, however, cautioned that people should be sensitive to the real issues, which are efficiency and survival of the power supply sector.
He stated the processes and procedures that could lead to suspension in the market notification of non-compliance.
“When a participant violates the market rules or fails to pay amounts due to the market operator, the market operator will first notify the participant in writing, specifying the violation and requesting that corrective action be taken within a specified period.
“If the participant fails to comply with the notice, the market operator may issue a notice of intention to suspend a participant’s access to the market. This notice will specify the reasons for the intended suspension, the proposed duration of the suspension, and the conditions for lifting the suspension,” the organisation said.
The statement stressed that the participant will be allowed to respond to the notice of intention to suspend and provide reasons why the suspension should not be imposed.
If the participant still fails to comply with the “notice of intention to suspend’, the market operator, Eje pointed out, may issue a ‘notice of suspension’, which may last for 30 business days after which the MO can escalate the suspension to the commission for the business continuity regulation to click in.
Thereafter, it added that the notice will be sent to the participant by a registered mail, courier, or electronic means, and will also be published on the market operator’s website.
“During the suspension period, the market operator may also take steps to secure any outstanding payments or obligations owed by the participant.
“After the suspension period, the participant may apply for reinstatement by providing evidence of compliance with the market rules and any other conditions specified in the ‘notice of suspension’.
“The market operator will review the application and make a determination on whether to lift the suspension or not,” Eje explained.
Aba Power
The MO statement is coming on the heels of the cry of Aba Power that the TCN has thrown Aba into total darkness by disconnecting Aba Power from the national grid.
“Most of Abia State has since this morning been thrown into unprecedented and indefinite darkness by the Market Operator, an arm of the Transmission Company of Nigeria (TCN) in a move regarded in the power sector as a punitive measure against the country’s newest electricity distribution company, Aba Power Limited, over payment of statutory fees to federal government agencies.”
“ The TCN, the country’s sole transmission firm, wrote a letter to Aba Power on April 19, 2023, with reference number TCN-MO-003-APL-049-VOL2-202, directing it to pay N869210.059.58 within 30 working days, but the same day the same company wrote a letter, with reference number TCN-MO-003-APL049-VOL-202, to the Market Operator instructing it to disconnect Aba Power from the national grid from April 21, 2023.”
“It is strange how the two letters emanating from the same source could contradict each other”, noted Engineer Ben Caven, a former executive director of the National Electric Power Authority (NEPA) reputed to be the only person to have headed the Transmission, Generation and Engineering divisions in the defunct power parastatal.
“I want to assume that there is no sinister motive, but a situation where a letter was written on April 19, delivered the next day to an electricity distribution company and then cut off power supplies to the distribution company within a couple of hours the same day over a debt of a whopping N896m is unprecedented.
Patrick Umeh, the Aba Power managing director who used to be a commissioner with the National Electricity Regulatory Commission (NERC), denies that his company has been nonchalant towards the payment of fees to government agencies.
“We also paid last month N500m to the Niger Delta Power Holding Company that sells electricity to us”.
“Our monthly obligation to the Niger Delta Power Holding Company (NDPHC) came to almost N800m when we raised power supply to the ringfence from 25megawatts to 80MW”, said Umeh, who was also an executive with the Los Angeles Water and Power Corporation in the United States.
Given the fact that the Aba Ringfence was thrown into the darkness between March 15 and 18 over payments to Federal Government agencies, according to Engr Eneh, “the new action by both the TCN and the MO cutting off supplies to the area appears selective”.
He recalled that the Federal Government has been subsidising the 11 old distribution companies enormously since their privatisation, pointing out that the government paid a subsidy of N120bn in 2022 alone.
The 11 DisCos, he said, were expected to pay the Market Operator N70bn in the first quarter of last year, but paid only N35.2bn.
“Still, no one cut them off from the national grid, nor were there threats to do so”, he stated.
“It is difficult to fathom the ongoing unbearable pressure on Aba Power which has never received a Kobo subsidy.
“Disconnecting Aba Power will make matters worse for everyone, including the TCN and the MO that cannot earn any money anymore from most of Abia State”.
The Aba Power MD pleaded that the firm be given some time to sort out its debt to the TCN and the MO in consideration of the tremendous economic challenges in the country.
He concluded: “Very soon, we will commission the Geometric Power plant in Aba, from where we will get our own electricity and provide our customers constant, quality and affordable electricity”.
Industrialists Cry out
Meanwhile, industrialists in Aba, Abia State, have risen in stout defence of Aba Power Limited, which was disconnected from the national grid on by the TCN over an N896.21 million debt owed as fees to government agencies in the power sector.
The TCN had in a letter with reference number TCN-MO-003-APL-049-VOL2-202, dated April 19, 2023, asked Aba Power to clear its debt within 30 working days, but on the same day the TCN turned around and wrote another letter with reference number TCN-MO-003-APL-049-VOL2-202 to the MO directing it to yank off Aba Power from the transmission network from April 21, 2023.
But Aba Power claimed that it has paid N550 million and asked for more time to sort out its debt with the TCN.
However, rising from an emergency meeting of its executive committee that was held yesterday in a prominent hotel in Aba, the Chairman of Association of Indigenous Manufacturers in Aba (AIMA), Dr. Gregory Nwankwo, declared that was difficult to understand why Aba Power, Nigeria’s 12th and newest electricity distribution firm which began operations only last year, was selected for such treatment whereas the older ones that commenced operations in 2013, and owe much higher amounts, despite huge federal government subsidies, are still receiving supplies.
Nwankwo said: “The TCN operates the sole transmission network in the country and should show a greater sense of responsibility in discharging its duties, all the more so given the fact that it is a federal government enterprise and the fact that electricity is vital for our very existence in the modern age.”
Criticising a situation where manufacturers in Aba and its environs are compelled to self-generate power at N830 per litre of diesel, which escalates production cost enormously, Nwankwo remarked that the Aba Power’s disconnection from the national grid “can only worsen the nation’s economic crisis”.
The manufacturers described as premeditated and discriminatory the action against Aba Power, which has been providing electricity to the Aba Ring-fenced Area comprising nine out of the 17 local government areas in Abia State, since February, 2022.
He said, “both the TCN and the Market Operator owe the nation an explanation as to why a new firm, which has not received a kobo subsidy from the government, unlike the other 11 distribution companies that have been receiving billions of Naira subsidy, should be subjected to this treatment which has thrown a major section of Nigeria reputed for high industrial production into indefinite darkness.”
The association also implored its members and other customers of the utility owing Aba Power to pay up and urged those who can afford to pay in advance to do so “since we can always be refunded or be given energy credit like customers who pay for prepaid meters.
“The people and government of Abia State have a duty to make Aba Power succeed despite many man-made odds,” Nwankwo said.
Reacting to the recent development on Monday, the Civil Liberty Organisation (CLO) called on President Muhammadu Buhari to direct the Ministry of Power to restore electricity to Abia people and also probe the Market Operator (MO) and the Transmission Company of Nigeria (TCN) for the abruptly disconnecting Aba Power Limited from the national grid on Friday, April 21, for nonpayment of N896.21 million debts.
The CLO in a press statement, stated that the abrupt disconnection of nine local governments areas in Abia State, including Aba that is the heartbeat of Small and Medium Enterprises (SMEs) and manufacturing activities in Southeast Nigeria, tantamount to disrupting the country’s national security.
The South-east Zonal Leader of the CLO, Mr. Aloy Attah added: “Aba is Nigeria’s manufacturing capital and a most important commercial centre. So, the disruption of national security is at the heart of the TCN action.”
But the CLO described the development as a siege on national security, alleging that “all the other 11 DisCos established since 2013 are owing far greater amounts, yet none has been subjected to this treatment because the federal government understands the far-reaching implications of putting any part of the country in complete darkness even for a day.”
The CLO expressed satisfaction that Aba Power has been making good efforts to discharge its financial obligations to suppliers and government agencies as well as its customers.
“We are also satisfied that it paid last month N500 million to the Niger Delta Power Holding Company and N50 million to the TCN.
“What is more, we are satisfied that it raised power supply in the Aba Power Ring-fenced Area from 25 megawatts in September to 80MW last February.
The CLO claimed that the federal government subsidised the distribution companies with N120 billion in 2022 alone.
It, therefore, described the disconnection, as scandalous, arguing that the MO, an arm of the TCN owned by the federal government, “didn’t mind putting a whole state in darkness, including the Nigerian Army, the Nigerian Navy, the Nigeria Police Force, the Department Security Service, the Civil Defence and National Security Organisation in Abia State which rely on constant electricity supply to discharge their onerous duties to the Nigerian people in a state with grave security challenges.”