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TCN threatens to disconnect DisCos, GenCos over non-compliance with market rules

TCN threatens to disconnect DisCos, GenCos over non-compliance with market rules
April 26
09:00 2023

The Transmission Company of Nigeria (TCN) says it will sanction erring electricity companies over non-compliance with the market rules.

In a statement on Tuesday, Edmund Eje, TCN’s market operator (MO), said one of the consequences of the sanction would be the partial or complete disconnection of defaulters from their point of connection to the grid.

According to Eje, market participants in the power sector include generation companies (GenCos), and the transmission and distribution companies (DisCos).

He said it is natural that some of the sanctioned players may attempt to “politicise the action to score cheap points and whip up unnecessary sentiments”.

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The TCN market operator, however, advised consumers to be sensitive to the real issues — which is efficiency and survival of the Electricity Supply Industry (NESI).

“NESI is governed by rules which are absolutely necessary for the viability and sustainability of the sector. As such these rules are sacrosanct and must be complied with by all existing or new players in the sector,” Eje said.

“For all the players to interact effectively and create the requisite harmony for growth, efficiency, profitability and of course, continued sustenance of the sector; the rules set for governance and regulation of relationships between all in the sector must be obeyed and upheld.”

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Eje said some of these rules can be found with the MO, adding that adherence to the market rules is below expectation.

According to Eje, in the electricity supply market, indiscipline was one of the major factors dealing a disastrous blow to the scalability and growth of the market.

“Participation agreement is signed by all participants, but to comply with them is usually an uphill task for many,” he said.

“If the rules of every game are observed, there would be no need for sanction.”

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PROCEDURES FOR SANCTIONS

Eje also said when a participant violates the market rules the MO would first notify the participant in writing, specifying the violation and requesting that a corrective action be taken within a specified period.

“This notice will specify the reasons for the intended suspension, the proposed duration of the suspension, and the conditions for lifting the suspension,” he added.

”If the participant still fails to comply with the ‘notice of intention to suspend’, the market operator may issue a ‘notice of suspension’, which may last for 30 business days.

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“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 MO will review the application and make a determination on whether to lift the suspension or not.”

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Last week, the Transmission Company of Nigeria (TCN) disconnected the Aba Power Limited from the national grid over an alleged N896 million debt owed as fees to government agencies in the power sector.

The company’s disconnection has been criticised by stakeholders in the state.

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