Why FG Ordered Suspension Of Enugu, Eko, Ikeja Discos From National Grid

Brendan Umoren

 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”.

The Discos were alleged to be owing the Transmission Company of Nigeria (TCN) N231 billion energy service debt.

In notices issued by the Market Operator (MO), 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.

A directive was also given for the suspension of Eko Electricity Distribution Company on similar grounds.

Meanwhile Ikeja Electric, through its spokesman, Mr. Felix Ofulue, yesterday stated that the company had provided security cover to the market operator.

“However, the MO by its letter datedJune 13, 2019 and received on Friday, June 21, 2019 advised IE to increase the value of the Security Cover within two business days. In view of the very short notice period, Ikeja Electric submitted a duly acknowledged letter to the MO on Tuesday, June 25, 2019 seeking for extension of time to submit the Bank Guarantee to provide sufficient time for its bankers to process the requests through the bank’s credit committees and other relevant approvals procedures.

We are therefore at a loss at the MO’s order, signed on June 26, 2019 and published today.

Notwithstanding the above, IE assures all its customers and other stakeholders that everything will be done to ensure that there is no deliberate disruption to services.

“We will continue to engage the Market Operator – who plays a critical role in stabilising the Market and the Sector – to resolve the issues raised in the publication.”

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