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Why Aba Electric, Kano, Kaduna DisCos were suspended, disconnected

By Constance Athekame
Abuja, April 29, 2023
The Transmission Company of Nigeria (TCN) has announced the suspension of three electricity distribution companies by the Market Operator (MO) for breach of market rules.
The affected companies are APLE Electric Limited, Kano and Kaduna Electricity Distribution Companies.
Mrs Ndidi Mbah, TCN’s General Manager, Public Affairs, in a statement in Abuja on Friday, said that these rules govern and sanitise the Nigerian electricity supply industry.
According to her, the Market Operator is mindful of the need to ensure the continued sustenance of the Nigerian Electricity Supply Industry (NESI), which requires strict adherence to market rules and the application of sanctions where necessary.
She said that due diligence was observed by the MO before issuing the suspension/disconnection order, which is in accordance with procedures of the rules guiding the market.
“This is to ensure the preservation of the market and that non-compliant participants are held accountable for their actions.
“The APLE Electric Limited was found to be in non-compliance with the Market Rules for not having adequate Bank Guaranty and for incomplete payments of APL’s MO’s invoices from September 2022 to February 2023.
“As per the market rules, the MO first sent a request for a bank guarantee to APLE on the Nov. 29, 2022,” she said.
Mbah said that the company failed to provide the required bank guarantee, consequently, a Notice of Event of Default was issued to APLE on  Dec 7, 2022, for incomplete payment of issued invoices.
“Following the notice of event of default, a Notice of Intent to Issue a suspension order was issued on Dec. 14, 2022, based on the Market Rules.
“APLE requested for a hearing which was held online on Dec. 20, 2022, where APLE was given an opportunity to show just cause why it should not be issued a Suspended/Disconnected Order.
“After the hearing, a 14-business day notice was issued on the March 21 in three (3) national daily newspapers (Daily Trust, Guardian & Thisday) as required by the Market Rules. Thereafter, a suspension order was issued on April 19, which required APLE to cure its defaults,” she said.
Mbah said that the disconnection order was carried out on  April 20 in line with the market rules.
She said that this order resulted in the disconnection of the Feeders within the APLE franchise area until such a time that they provide the required bank guarantee and settle their outstanding invoices with the MO.
Mbah also said that the Kaduna and Kano DisCos were equally found to be in non-compliance with the market rules for not having adequate bank guarantees and for incomplete payments of their MO invoices for the time-line January 2020 to February 2023.
She said that both companies were sent a request for their bank guarantees in line with the market rules, on Feb. 16, 2022, and they failed to provide the required bank guarantees.
“Consequently, a notice of event of default was issued on March 2, 2022, for incomplete payment of invoices,” she said.
Mbah said that the notice of event was followed by a notice of intent to Issue a suspension order, issued on May 9, 2022.
“Both DisCos requested for hearing which were held on May 31, 2022, (KEDCO) and June 2, 2022 (KAEDCO), where both DisCos were given an opportunity to show just cause not to be suspended/disconnected.
“After the hearing, a 14-business day notice was issued on the March 21, 2023, in three national daily newspapers (Daily Trust, Guardian & Thisday newspapers), as required by the market rules.
“Thereafter, a suspension order was issued on April 20, 2023, which required KAEDCO and KEDCO to cure their defaults,” she explained.
Mbah said the disconnection order was then carried out on April 26, in line with the market rules.
She said the order resulted in the disconnection of the major feeders within the franchise areas of both KAEDCO and KEDCO, until such a time that they provide the required bank guarantees and settle their outstanding invoices with the MO.
According to her, market rules provide clear and concise procedures for enforcing compliance with its provisions, and in these cases, she said that the MO acted in accordance with procedures to ensure that non-compliant participants are held accountable for their actions.

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