The Transmission Company of Nigeria (TCN) has recommended the liquidation of a yet-to-be-disclosed power distribution company (DisCo) to the Federal Government.
According to the Managing Director of TCN, Usman Mohammed, the transmission company had advised the Federal Government to liquidate the DisCo for failure to abide by market rules.
Mohammed said, “When you cannot abide by the market rules, then you are making things tough for the market, which is why TCN has recommended that one of the DisCos should be liquidated as a result of non-performance.”
[READ MORE: List of Dividends announced so far in 2019 (August 2019)]
The identity of the DisCo was, however, not revealed. Mohammed lamented that it was sad that some market participants failed to observe the rules of the market.
“The market has to be driven by rules and regulations. People must comply with the rules and there must be sanctions for non-performance and reward for extra-ordinary performance.
“If the market is existing in such a way that anybody who does not perform can get away with it, then there’s no way that market can grow. And our belief is that this our market should grow by all means.”
What you should know: Recently, the transmission firm has been aggressive in the enforcement of market rules which are within its purview. The firm has already suspended and removed some distributors from the country’s electricity grid.
The TCN, on Sunday, July 28, 2019, suspended and disconnected Port Harcourt Electricity Distribution Company (PHED) from the power grid. It, however, lifted the suspension on August 20.
Similarly, on Monday, August 19, 2019, the transmission firm disconnected some power feeders of the Kano Electricity Distribution Company (KEDC) and warned that it might further increase sanctions against the DisCo, following KEDC’s failure to comply with laid down market rules.
[READ ALSO: 4 Industries Impacted by Bitcoin Usage]
Why this matters: Going by Mohammed’s statement, the recent enforcement of market rules by the Market Operator has made it possible for participants who do not know the market rules to start taking cognizance of the laws that guide operations in the sector.
He said, “There are many people in the market who are supposed to know the rules, but they do not understand the rules, and this includes the participants. This is because I’ve seen situations where people write letters that do not make sense.
“When you write a letter, for example, to the Market Operator to say that, ‘I will not be able to pay.’ That has an implication. If you will not be able to pay within the market that means you should be liquidated.”
