A prolonged blackout looms in Lagos and Enugu states following last Thursday’s order by the Transmission Company of Nigeria (TCN) suspending the Enugu Electricity Distribution Company (EEDC) and the Ikeja Electricity Distribution PLC (IKEDC) from the country’s electricity market.


The orders, issued by Nigeria’s independent transmission system operator, were published in advertorials in national newspapers on Wednesday and Thursday.

The advertorials were signed on behalf of the Market Operator by E. A Eje, an engineer.

Consequently, electricity intake by the two companies from the Transmission Service Provider through the national grid will henceforth be disconnected.

The TCN said the order was for the enforcement of the market participation agreement entered into with EEDC and IKEDC on February 23, 2015, and March 5, 2015, respectively.


With the order, the TCN said the 33KV feeder transmission stations and other interface facilities supplying electricity to sections of Enugu State, including New Heaven, Kingsway 1 and 2, will be disconnected from the national grid.

It is not clear how long the facilities would remain disconnected.

Impending sanctions
TCN spokesperson, Ndidi Mbah, confirmed the dispute with the DISCOs over the regulatory breaches.


She said the TCN has since written to each of the other affected DISCOs in the country to request them to come forward with their remedies in compliance with the market rules.

Mrs Mbah said a similar fate may befall those who fail to act within the stipulated deadline in the market rules.

Rules
In line with the agreement, TCN said both EEDC and IKEDC agreed to comply at all times with the provisions of Clause 3.2 of the electricity market rules, grid code, metering code, and market procedures.


Accordingly, the DISCOs were expected to, among other roles, provide metering information in a timely manner and in the approved format in accordance with the Metering Code.

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Besides, they were to ensure that they complied with the market procedures; provide security deposit when so required to serve as a guarantee of payment for all amounts due from their participants to the TCN, as well as settle, in a timely manner, any payment due.

Contrary to the provisions of the agreement, the TCN said, in the advertorials that both EEDC and IKEDC failed to maintain a security cover, thereby breaching Section 45.3.1(d) of the market rules.


Rule 45.3 of the agreement applies to participants who defaults by failing to renew the Security Cover required within the specified time.

The TCN said both EEDC and IKEDC were notified of the default of the rule through a “NOTICE OF EVENT OF DEFAULT” (NED/2019/002) and (NED/2019/003) dated May 24, 2019.

In the notice, the TCN said both operators were required to remedy the default in line with relevant sections of the rules within five days or two business days.


In the alternative, the rule demands the defaulting party make a claim upon the security cover it maintained for an agreed amount actually owed, or which forms its contingent liability to the market operator under the rules and grid code.

To be cleared of the infraction, the TCN said the defaulting parties must pay all monies due under the market rules and the grid code.

This includes any calculated additional default Interest, costs, and expenses incurred by it by reason of the default.


In addition, the defaulting party must also provide additional security cover in compliance with the requirements of market rules.

‘EEDC, IKEDC failed to comply’
Following the failure of EEDC and IKEDC to meet the deadline, the TCN said both companies were, on May 31 issued notices of suspension from the market, disconnection from the grid and restriction of some of their rights.

Although TCN said IKEDC responded to the notice demanding the remedy to its security cover, by forwarding a bank guarantee issued on its behalf by Zenith Bank on June 3, the EEDC responded with a request for a hearing before the market operator over the suspension and disconnection orders.


According to TCN, the bank guarantee issued by Zenith Bank, on behalf of IKEDC were considered ‘deficient’.

On June 13, PREMIUM TIMES learnt the company was requested to provide a fresh security cover or risk the enforcement of the suspension order.

The TCN said IKEDC again reportedly failed to meet the deadline.

For EEDC, the TCN said a three-man panel, consisting market operator institution staff, the market operator enforcement panel (MOEP), was set up to adjudicate on the issue.


Following the hearing conducted on June 13, the MOEP, after reviewing submissions by both market operator compliance officers and the EEDC, recommended the suspension of EEDC from the market.

Wielding the big stick
Consequently, based on markets rules 45.3.9, 45.3.12 and 45.3.13, the TCN has ordered as follows:

“(a) That Enugu Electricity Distribution Company is hereby suspended from Market Operator Administered Markets.


“(b) The restriction of Enugu Electricity Distribution Company intake from the grid through a Disconnection Order to the Transmission Service Provider to disconnect some facilities of Enugu Electricity Distribution Company until the event of Default stated in NIISO/2019/002 is remedied.”

The order was issued on Monday, June 24.

A similar order was issued on Thursday, June 26, against the IKEDC.


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