The Market Operator (MO) of the Transmission Company of Nigeria (TCN) has suspended the Abuja Electricity Distribution Company (AEDC) for not complying with market rules.
Mr. Ali Ahmad, Market Operator of TCN, said in Abuja on Friday that the suspension notice was communicated to AEDC after previously notifying it in writing of its default of the market rules.
Ahmad said that AEDC also failed to provide the MO with an adequate Bank Guarantee as required by section 15.3.3 of the market rules.
He said that AEDC was served several notices, including a request for Fulfillment of Prudential Requirement on February 13 and a Notice of Event of Default: Non-Fulfillment of Prudential Requirement on March 22, but none were honored.
According to him, a Notice of Intent to Issue a Suspension Order: Non-Provision of Adequate Bank Guarantee was subsequently given to AEDC on April 8.
“The MO in these notices requested that corrective actions be taken within a specified period to address the default.
“Despite all notifications, AEDC failed to address the default. In view of this non-compliance, AEDC is hereby suspended from the MO-administered electricity market,” he said.
He said that to remedy the situation, AEDC must provide an adequate Bank Guarantee within five business days from the date of this notice.
AEDC to be disconnected from the national grid
In addition, residents in the Federal Capital Territory, as well as Niger, Kogi, and Nasarawa States, may face power outages starting on July 28, 2024, as the TCN said it will disconnect AEDC either partially or permanently from the national grid if it fails to redeem itself.
He mentioned that AEDC’s network could face partial or complete disconnection from the grid if the issue wasn’t resolved within five business days, as specified in section 45 of the market rules.
The TCN announced 28th July 2024 as the disconnection date adding that the disconnection points will include: 33Kv Feeder from 132/33Kv Katampe 1 Transmission station and 33Kv Feeder 3 from 132/33Kv Central Area transmission station.
“The defaulting Market Participant AEDC has been duly notified of their infractions concerning non-compliance with section 15.3.3.a of the Market Rules. Newspaper publication has been made in line with the Market Rules which gives AEDC a deadline of five (5) business days from the date of this publication to remedy its market rules infractions.
“Furthermore, after 30 business days of the disconnection from the grid and the default is not addressed, the Market Operator will terminate AEDC’s Market Participation Agreement,” he added.
What you should know
Nigeria’s electricity distribution companies (DisCos) have continually faced various sanctions from regulators due to non-compliance with industry standards.
These sanctions arise from multiple issues, including overbilling unmetered customers and violating the Nigerian Electricity Regulatory Commission (NERC) rules.
The regulatory bodies have been diligent in monitoring and enforcing compliance to ensure fair practices within the sector.
Recently, the Abuja Electricity Distribution Company (AEDC) was fined N200 million for overbilling customers in Band A.
This penalty reflects the seriousness with which NERC views such violations and its commitment to protecting consumer rights.
The fine serves as a warning to other DisCos to adhere to fair billing practices and regulatory requirements.
These measures are part of a broader effort to put DisCos in check and prevent them from defrauding customers.
By imposing fines and sanctions, NERC and other regulators aim to create a more transparent and accountable electricity distribution system.