On Tuesday, the Federal Government announced that it has started disconnecting several power companies from the national grid due to their violation of the Electricity Market Rules. The government claimed that the Nigerian electricity supply industry was controlled by laws, which were critically required for the viability and sustainability of the sector, but it avoided naming the impacted power facilities.
The Federal Government claimed that these regulations were inviolate and that any new or current actors in the industry had to abide by them.
Electricity generating, transmission, and distribution businesses are key actors in the power sector. The regulations must be followed and kept in order for all participants to interact successfully and establish the necessary harmony for the growth, efficiency, and profitability of the secto, according to the government.
“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, Dr Edmund Eje, said in a statement issued in Abuja.
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 understandable that some of the players who had been punished could try to politicize the situation in order to garner quick points and inflame unwarranted feelings, but he advised against ignoring the main concerns, which were the effectiveness and continued existence of the NESI.
He clarified the steps the government takes through TCN before suspending or disconnecting a power business from the market in order to ensure clarity. When a participant broke the market’s regulations or failed to pay sums owed to the Market Operator, he claimed notification of non-compliance would be sent out first.
“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,” Eje explained.
