The federal government has ordered the disconnection of three electricity distribution companies from the national grid over “non-compliance with the conditions of market rules”.
DisCos are allegedly owing the Transmission Company of Nigeria (TCN) N231 billion energy service debt.
In notices issued by the market operator, an arm of the TCN, a directive was given for the suspension of – Eko, Enugu and Ikeja distribution companies for failing to renew their security cover.
Security cover is a deposit established to serve as a form of guarantee of payment for all amounts due from the DisCos to the market operator for energy received.
The DisCos were reportedly given the room to address the situation but they were said to have refused to respond within the stipulated time.
“The restriction of Ikeja Electricity Distribution Company intake from the grid through a Disconnection Order to the Transmission Service Provider to disconnect some facilities of Ikeja Electricity Distribution Company until the Event of Default stated in NIISO/2019/003 is remedied,” the notice to Ikeja DisCo read.
The market operator enforcement panel (MOEP) recommended the suspension of Enugu DisCo having defaulted in payment and not addressing the issue within the stipulated time.
“That Enugu Electricity Distribution Company (EEDC) is under suspension through Market Operator issued Order TCN/ISO/MO/002,” the notice read.
“That Enugu Electricity Distribution Company (EEDC) has been suspended from the Market Operator Administered Market due to an EVENT OF DEFAULT that was not remedied. EEDC was notied of this EVENT OF DEFAULT by a NOTICE OF EVENT OF DEFAULT (NED/2019/002) dated May 24, 2019.”
A directive was also given for the suspension of Eko Electricity Distribution Company on similar grounds.
Reacting to the development, Paul Okeke, EEDC’s deputy managing director, said the company is making necessary arrangements to procure and deliver security cover to the market operators.
Felix Ofulue, head of corporate communications of Ikeja DisCo, said the company had sought an extension of time to fulfil its obligation.
“Notwithstanding the above, Ikeja Electric assures all its customers and other stakeholders that everything will be done to ensure that there is no deliberate disruption to services,” Ofulue said.
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