For defying the directives of the Nigerian Electricity Regulatory Commission (NERC) on remedial actions ordered on the Transmission Company of Nigeria (TCN) and its market operator, the regulator is set to apply sanctions from next Wednesday on expiration of the seven-day warning.
NERC, on monday issued notices of commencement of enforcement action on the Market Operator (MO) and the TCN following their failure of the MO to comply with the August 27 directive of the commission on remedial actions.
The regulator had in the August 27 directives the MO to close down its unilateral bank accounts while the TCN is to reinstate those persons whose names have removed from the transmission company’s payroll. The two are directed to report compliance to the regulator.
MO is a division of the TCN that issues market settlements and invoices to the market participants and service providers in the Nigerian Electricity Supply Industry (NESI).
TCN, which is currently under contract management of Manitoba Hydro of Canada, is a licensee of NERC, and it is empowered to manage the Market Operator (MO) and the System Operator (SO), which is responsible for the wheeling of electrons (electricity) from generation to electricity distribution companies.
However, issues arose when at the twilight of the immediate past administration; the Federal Government appointed some staff in the Market Operator division as a separate management and TCN in response removed names of the elevated staff from its payroll.
The Market Operator, which incidentally partly manages cash flow in the electricity market reacted by opening a separate bank account other than the one known to TCN.
The matter was subsequently brought before the Commission at its August 19, 2015 regulatory meeting where parties were consequently issued directives on August 27, 2015, to take remedial actions which they are yet to comply with.
In separate notices signed by the Deputy General Manager, Enforcement Unit, NERC, Mr. Chijioke Obi, parties were told that their continued actions were in disobedience to Section 63(1) of the Electric Power Sector Reform (EPSR) Act 2005 which stipulates, “A licensee shall comply with the provisions of his licence, regulation, codes, and other requirements issued by the Commission from time to time.”
They were also reminded of the section 3(1) of the licence conditions which stipulates, “Licensee shall comply with any orders, directions and determinations made by the Commission pursuant to the Act, any regulations made under Act or this licence.”
Specifically, TCN was directed to “put the appointed/elevated staff back on the payroll and on the level that matches the present status in the interim until counter Presidential directive to the one elevating and appointing them to the positions on the instructions former president is made.”
Whereas the Market Operator was directed to, “Immediately close the subsidiary account, restore the original account to the normal condition of consensual approval and inform the Commission accordingly.”
And that Market Operator should, “Continue funding the System Operator with the previously designated amount as paid other market participants.”
The Commission in the notices to parties said that their failures to comply with the relevant laws and conditions of TCN licence would compel it to start Enforcement Proceeding against TCN and may invoke disciplinary measures as may be appropriate.
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