The Transmission Company of Nigeria (TCN), says it will reconnect Kano DisCo, Kaduna Electric, and APLE Electric to the power grid from today, following a directive from the Minister of Power, Abubakar Aliyu.
The three distribution companies (DisCos) were disconnected from the grid on Friday as a result of noncompliance with Market rules.
In a statement yesterday night by the Market Operator, TCN, Edmund Eje, said the planned reconnection came after the intervention of the Minister.
Regarding the reconnection of the DisCos, TCN said the Minister “considered the collateral consequences on the paying Disco customers.”
The statement reads further: “These suspended and disconnected defaulting Market participants will be reconnected to the National Grid at the instance of the Minister of Power.
“The Intervention by the Minister has automatically prolonged the grace period to 60 days from this publication.”
TCN however urged all Market Defaulters to comply with the provisions of the Market Rules with respect to payment of their outstanding invoices, posting of Bank Guarantees and forwarding of the active Power Purchase Agreements (PPA) as the case may be to the Market Operator/TCN.
It also warned that: “It should be noted that other defaulters who are yet to be suspended should cure their defaults these sixty days, at the expiration of this grace period, the Market Operator will resume sanctions in line with the Market Rules.”
These suspended and disconnected defaulting Market participants will be reconnected to the National Grid at the instance of the Minister of Power.
DisCos suspension
In a statement on Friday, TCN spokesperson, Ndidi Mbah, announced the suspension of three DisCos for breach of market rules.
Ms Mbah said TCN, as the Market Operator (MO), is mindful of the need to ensure the continued sustenance of the Nigerian Electricity Supply Industry (NESI), which requires strict adherence to market rules and the application of sanctions where necessary.
She insisted that due diligence was observed by the MO before issuing the suspension/disconnection order, which is in accordance with procedures of the rules guiding the market and for enforcing compliance with its provisions.
The statement also reads: “This is to ensure the preservation of the market and that non-compliant participants are held accountable for their actions.
“The APLE Electric Limited was found to be in non-compliance with the Market Rules for not having adequate Bank Guaranty and for incomplete payments of APL’s MO’s invoices from September 2022 to February 2023.
“As per the market rules, the MO first sent a request for a bank guarantee to APLE on November 29, 2022.”
She said the company failed to provide the required bank guarantee, consequently, a Notice of Event of Default was issued to APLE on December 7, 2022, for incomplete payment of issued invoices.
“Following the notice of event of default, a Notice of Intent to Issue a suspension order was issued on December 14, 2022, based on the Market Rules.
“APLE requested for a hearing which was held online on December 20, 2022, where APLE was given an opportunity to show just cause why it should not be issued a Suspended/Disconnected Order.
“After the hearing, a 14-business day notice was issued on March 21 in three (3) national daily newspapers (Daily Trust, Guardian & Thisday) as required by the Market Rules. Thereafter, a suspension order was issued on April 19, which required APLE to cure its defaults,” she explained.
The disconnection order was thereafter carried out on April 20 in line with the market rules, which resulted in the disconnection of the feeders within the APLE franchise area until such a time that they provide the required bank guarantee and settle their outstanding invoices with the MO.
Similarly, Mbah said the Kaduna and Kano DisCos were equally found to be in non-compliance with the market rules for not having adequate bank guarantees and for incomplete payments of their MO invoices for the time-line January 2020 to February 2023.
Both companies were sent a request for their bank guarantees in line with the market rules, on February 16, 2022, and they failed to provide the required bank guarantees.
“Consequently, a notice of event of default was issued on March 2, 2022, for incomplete payment of invoices,” she said.
Ms Mbah said the notice of event was followed by a notice of intent to Issue a suspension order, issued on May 9, 2022.
“Both DisCos requested for hearings which were held on May 31, 2022, (KEDCO) and June 2, 2022 (KAEDCO), where both DisCos were given an opportunity to show just cause not to be suspended/disconnected.
“After the hearing, a 14-business day notice was issued on March 21, 2023, in three national daily newspapers (Daily Trust, Guardian & Thisday newspapers), as required by the market rules.
“Thereafter, a suspension order was issued on April 20, 2023, which required KAEDCO and KEDCO to cure their defaults,” she explained.
The disconnection order was then carried out on April 26, in line with the market rules and resulted in the disconnection of the major feeders within the franchise areas of both KAEDCO and KEDCO, until they provide the required bank guarantees and settle their outstanding invoices with the MO.
