Discos, Government, Ministry of Power, NERC, Photo, TCN

Electricity Market Operator Suspends Defaulting DisCos for Low Security Covers

Posted: July 29, 2019 at 3:52 pm   /   by   /   comments (0)

The Nigerian Electricity Market is getting more interesting by the day and the Electricity Distribution Companies, DisCos, are the ones with the burnt end of the stick. The DisCos have severally been accused of causing illiquidity in the Market by their poor monthly returns on their monthly invoices , which hovers between 30 and 35%.

TCN Management, for example, has of recent been accusing the DisCos of not having adequate protection for their distribution networks which cause distribution faults to bounce on TCN networks and causing the spite of recent transformer fires.

According to TCN, there is serious need for the DisCos to embrace recapitalization to provide the needed investable funds to enable the DisCos protect their lines and also be in a position to take more power available in the system to the final customers.

The latest assault on the DisCos is coming from the Electricity Market Operator, better referred to as MO, suspending and even disconnecting some feeders of the defaulting DisCos from the Market. The DisCos so far suspended and whose suspensions have been lifted include Eko, Ikeja and Enugu DisCos after they remedied the defaults.

The latest set of DisCos to be suspended from the Market are Kano and Port Harcourt Electricity Distribution Companies. Two of their important 33kV feeders have been disconnected pending when they cure their defaults with regards to the Market Rule and Participant Agreements.

The MO wants all the DisCos to have the required amount of Bank Security Covers as stipulated by the Market Rule so that if need be, these SCs would be called if the DisCos are not able to pay 100% of their monthly electricity invoices. The MO says they are interested in instilling discipline and participants obligations to enable the Market to grow and develop.

According to some electricity market watchers and analysts, the MO has acted forthrightly and the Market needs to be weaned of the current spate of waywardness and resort to self help prevalent in the Market. For them the Market and all participants should be guided by the Rules and they should be consequences for defaults or breaches.

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