28 June 2019

Nigeria: Govt to Cut Power to Enugu Disco, Targets Others

The Federal Government has ordered the disconnection of Enugu DisCo's network from the national grid through the Transmission Service Provider (TSP) saying the DisCo failed to renew its security cover for energy transmission services.

Daily Trust learnt that a DisCo and GenCo in the Southwest, and a DisCo in the Northwest could get notices of intent to issue suspension for similar breaches of the Market Rule as the 11 DisCos owe TCN N231 billion energy service debt.

The Market Rule operational in the power sector holds the 11 DisCos responsible for posting Letters of Credit (LC) from their banks to the Transmission Company of Nigeria (TCN) and other market participants as a guarantee for wheeling energy on credit.

In a notice publication dated June 24, 2019, TCN said its Enugu Electricity Distribution Company (EEDC) was notified on May 24th of the default of Market Rules 45.3.1 to post the security cover which was said to have expired earlier.

Without response, TCN said it issued a 'Notice of Intent to Issue Suspension Order (NIISO/2019/002)' on May 31st after which the DisCo called for a public hearing to contest the suspension notice.

Rising from the hearing on June 13, 2019 a team of Market Operator Compliance Officers approved the suspension of the DisCo in line with extant rules.

It said: "That Enugu Electricity Distribution Company is hereby suspended from Market Operator Administered Markets.

"The restriction of EEDC intake from the grid through a Disconnection Order to the TSP to disconnect some facilities of Enugu Electricity Distribution Company until the Event of Default stated in NIISO/2019/002 is remedied," the notice dated June 24th, 2019 read.

The market rule shows the order can be enforced after two business days or five days if there is no compliance from the DisCo upon which the TSP, another arm of TCN, will disconnect the facilities, at least by month end.

The spokesman of the DisCo, Mr Emeka Ezeh, told our reporter on telephone that the management was shocked by the action of TCN because the issue had been resolved.

He said, "Our team are in the bank to raise the bank guarantee and it should be posted latest tomorrow. We don't know why they took the action which you referred to in the publication," Mr Ezeh said.

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