The management of Ikeja Electricity Distribution PLC (IKEDC) on Friday said it has begun moves to get the Transmission Company of Nigeria (TCN) to rescind its order to suspend it from participation in the electricity market and disconnect some of its facilities from the national grid.
On Thursday, the TCN moved to effect an order by Nigeria’s independent transmission system operator for the DISCO, along with its counterpart in Enugu, the Enugu Electricity Distribution Company (EEDC), to be suspended from the country’s electricity market.
The orders, published in advertorials in national newspapers on Wednesday and Thursday, were signed on behalf of the Market Operator by E. A. Eje, an engineer.
Consequently, the TCN said electricity intake by the two companies from the Transmission Service Provider through the national grid would henceforth be disconnected.
The TCN said the order was for the enforcement of the market participation agreement entered into with EEDC and IKEDC on February 23, 2015, and March 5, 2015, respectively.
According to the TCN, both DISCOs were in breach of the provisions of Clause 3.2 of the electricity market rules, grid code, metering code, and market procedures.
Part of the agreement was for the DISCOs to, among other roles, provide metering information in a timely manner and in the approved format in accordance with the Metering Code.
Besides, the DISCOs were also to ensure they complied with the market procedures; provide security deposit when so required to serve as a guarantee of payment for all amounts due from their participants to the TCN, as well as settle, in a timely manner, any payment due.
Contrary to the provisions of the agreement, the TCN said both EEDC and IKEDC failed to maintain a security cover, thereby breaching Section 45.3.1(d) of the market rules.
Despite adequate notice about the breaches, the TCN said the DISCOs failed to remedy their defaults within the stipulated period in line with relevant sections of the rules.
Consequently, both companies were, on May 31 issued notices of suspension from the market, disconnection from the grid and restriction of some of their rights.
But, in its reaction to the suspension order, IKEDC said part of its efforts to get it rescinded was to provide a security cover to the market operator.
PREMIUM TIMES learnt that the company had responded to the notice demanding it to remedy its security cover, by forwarding a bank guarantee issued on its behalf by Zenith Bank on June 3.
However, TCN said it considered the bank guarantee by Zenith Bank, on behalf of IKEDC, as ‘deficient’, with a request for a fresh security cover with increased value within two business days, or risk the enforcement of the suspension order.
The spokesperson to IKEDC, Felix Ofulue, in a statement, said that in view of the very short notice, Ikeja Electric submitted a duly acknowledged letter to the MO on Tuesday, June 25, seeking for extension of time to submit the Bank Guarantee.
He said the request for an extension was to provide sufficient time for its Bankers to process the requests through the bank’s credit committees and other relevant approvals procedures.
According to Mr Ofulue, the IKEDC was surprised by the market operator’s last Thursday’s decision to suspend it from the market.
He said notwithstanding, the company was making efforts to resolve the issue. He assured its customers and other interest groups of steps to avert deliberate disruption to its services.
“We will continue to engage the Market Operator – who plays a critical role in stabilizing the Market and the Sector – to resolve the issues raised,” Mr Ofulue said.
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