The Transmission Company of Nigeria (TCN) says the sanctions it slammed on over five power Distribution Companies (DisCos) recently are to help instill discipline in the electricity market and that they have only slight effect on electricity users.
In an exclusive post last weekend, TCN said in some cases, only a few connections in the affected DisCos’ franchise areas were disconnected by the Transmission Service Provider (TSP) usually around the headquarters of such DisCos.
“The essence of that is to serve as deterrent to the DisCos so they can be pushed to remedy the default for which they were suspended in the first instance,” the spokesperson of TCN, Mrs Ndidi Mbah said.
Daily Trust reports that from 2015 when the Transition Electricity Market (TEM) was declared, the 11 DisCos were supposed to start paying all their energy bills 100 per cent. However, energy bill is being paid at lower than 30 per cent average monthly to the Nigerian Bulk Electricity Trading Plc (NBET).
The payment for ancillary services, which is coordinated by the Market Operator (MO) office in the Nigerian Electricity Supply Industry (NESI), has also been around 30 per cent range.
The Market Rule which became much more active after the 2013 power sector privatization, stipulates that the DisCos post their security cover or Letter of Credit (LC) to guarantee payment for those ancillary services.
Mr Edmund Eje, the Market Operator, in a recent interview told this paper that while the MO wrote to the affected DisCos warning them of their low security cover or expired ones and giving them days to remedy the situation, some argued over it while others did not respond.
He said for those who argued the position, a public hearing was conducted for them through a hearing committee and the recommendation of that committee after a fair hearing from the DisCos led to the suspension of the affected power firms and in some instances, orders for the TSP to disconnect part of their proximate networks to their headquarters.
Ikeja, Eko and Enugu DisCos were earlier suspended for such defaults and were integrated with the disconnection orders lifted immediately they remedied the defaults. Port Harcourt and Kano DisCos were also suspended in late July 2019 for similar default.
However, through an order, TCN/ISO/MO/2019/005, Kano DisCo was again suspended for the second time. Both sanctions run concurrently until the defaults are remedied, TCN said last week.
