Key Highlights
- The power firms to be disconnected failed to adhere to the Electricity Market Rules which are necessary for the viability and sustainability of the sector.
- The Federal Government attributes many challenges in the power sector to indiscipline, explaining that it remains a factor halting the expansion of the sector.
- The Market Operator pointed out that some of the sanctioned power firms might attempt to politicise the action to score cheap points and whip up unnecessary sentiments.
The Federal government has moved to commence the disconnection of some power firms from the national grid due to their failure to adhere to the Electricity Market Rules.
This disclosure is contained in a statement issued by the Market Operator (MO), an arm of the Federal Government’s Transmission Company of Nigeria (TCN), Dr. Edmund Eje, on Tuesday in Abuja, where he attributed many challenges in the industry to indiscipline, explaining that it remains a factor halting the expansion of the sector.
Power sector rules must be complied with
Although the affected power firms were not mentioned, the government explained that the Nigeria Electricity Supply Industry was governed by rules, which were absolutely necessary for the viability and sustainability of the sector.
The Federal Government insisted that these rules were sacrosanct and must be complied with by all existing or new players in the sector.
Power sector players include the electricity generation, transmission, and distribution companies. For all players to interact effectively and create the requisite harmony for growth, efficiency and profitability of the sector, the rules must be obeyed and upheld, according to the government.
Efe said, “Some of these rules are domiciled with the Market Operator, but today, adherence to the Market Rule is below expectation,” the Market Operator, an arm of the Federal Government’s Transmission Company of Nigeria.’’
Defaulting power firms to be sanctioned
- He added, “NESI market indiscipline is one of the major factors dealing a disastrous blow to the scalability and growth of the market.
- “Market Participation Agreement is signed by all participants, but to comply with them is usually an uphill task for many. If the rules of every game are observed, there would be no need for sanctions.
- “Currently, the Market Operator – TCN, is embarking on sanctioning erring market participants, having given them notices and time to comply with the market rules. One of the fallouts of the sanctions will be the partial or complete disconnection of defaulters from their point of connection to the grid.”
Eje said it was natural that some of the sanctioned players might attempt to politicise the action to score cheap points and whip up unnecessary sentiments, but cautioned that people should be sensitive to the real issues, which were the efficiency and survival of the NESI.
Procedures for disconnecting power firms
The Market Operator outlined the procedures being taken by the government, through TCN, before suspending or disconnecting a power firm in the market.
He said notification of non-compliance would be issued first, as this had to do with when a participant violated the market rules or failed to pay amounts due to the Market Operator.
- Dr. Efe explained, “Notice of intention to suspend is then sent. If the participant fails to comply with the notice, the Market Operator may issue a notice of intention to suspend a participant’s access to the market.
- “This notice will specify the reasons for the intended suspension, the proposed duration of the suspension, and the conditions for lifting the suspension. This is followed by an opportunity to respond, where the participant will be allowed to respond to the notice of intention to suspend and provide reasons why the suspension should not be imposed.
- ‘’Then the notice of suspension would follow. Here, 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 after which the MO can escalate the suspension to the Commission for the Business Continuity Regulation to click in.’’