TCN suspends Abuja Distribution company, 3 other states in darkness

• The Nigerian Transmission Company has suspended the Abuja Electricity Distribution Company
• This occurred after the DisCo allegedly violated the terms of the market participation agreement
• The TCN said that the Abuja distribution business did not provide it with a necessary bank guarantee

Legit.ng journalist Zainab Iwayemi has over 3-year-experience covering the Economy, Technology, and Capital Market.

The Abuja Electricity Distribution Company has been suspended by the Transmission Company of Nigeria for violating the terms of the market participation agreement and market rules.

AEDC has signaled that it is pulling out of the MO-managed electricity market, according to TCN. Photo Credit: Sirisak Boakaew
Source: Getty Images

While TCN is the federal government firm that transports the electricity produced by power producing companies to power distribution companies across the nation, AEDC supplies electricity to the Federal Capital Territory, Kogi, Nasarawa, and Niger states.

The transmission business claimed in the suspension order, which had the number TCN/ISO/MO/2024/002, that TCN was not given a sufficient bank guarantee by the Abuja distribution company, which was against the regulations governing the power market.

“This is a formal suspension notice to Abuja Electricity Distribution Company due to noncompliance with provisions of the market rules and failure to provide the Market Operator with an adequate bank guarantee in line with section 15.3.3 of the Market Rules.“The MO had previously notified AEDC in writing of its default of the Market Rules via; 1. Request for Fulfillment of Prudential Requirement dated February 13, 2024. 2. Notice of Event of Default: Non-Fulfillment of Prudential Requirement dated March 22, 2024 and, 3. Notice of Intent to Issue a Suspension Order: Non-Provisions of Adequate Bank Guarantee dated April.8, 2024.

In these notices, the MO asked that corrective action be done to fix the default within a given time frame.

The TCN however stated that despite all notifications, AEDC was unable to fix this default.

Based on this, TCN concluded that AEDC has indicated that it has withdrawn from the MO-managed electricity market due to this non-compliance.

It further said that no new agreements or contracts with AEDC may be made while the suspension was in effect.

NERC to fine disCos for overbilling consumers

Legit.ng reported that the Nigerian Electricity Regulatory Commission has revealed that Discos who breach certain contractual obligations to regulators and customers would face additional penalties.

This will impact seven issues that would be used to evaluate each DisCo's performance, according to an Order on Performance Monitoring Framework for All DisCos.

The new order sought to hold the top management of each DisCo accountable for their compliance with reporting requirements and implementation of commission directives in line with the utility's terms and conditions.

Source: Legit.ng