NERC bares fangs on market operator over bank account

24 September 2015, Abuja – The Nigerian Electricity Regulatory Commission (NERC) has issued notice of commencement of enforcement action on the Market Operator (MO) for operating a unilateral bank account.

Dr. Sam Amadi, NERC chairman

Dr. Sam Amadi, NERC chairman

The commission had earlier directed the Transmission Company of Nigeria (TCN) to maintain a single account for the payment of electricity funds.

NERC’s directive came as a result of threat by the TCN management contractor to withdraw from the laid-down agreement over alleged “substantial breach of contract.”

The TCN management contractor had stated that the MO, which is an arm of the TCN, had opened a different bank account into which electricity funds were being diverted.

NERC in a statement yesterday, gave the erring MO seven days ultimatum to take remedial actions by winding down operation of the unilateral bank account and report compliance, failure which it faces disciplinary action from the commission.

The statement, signed by the Head, Public Affairs, Dr. Usman Abba-Arabi, explained that MO is a division of the Transmission Company of Nigeria (TCN) that issues market settlements and invoices due to the market participants and service providers in the Nigerian Electricity Supply Industry (NESI).

According NERC, TCN, which is currently under contract management of Manitoba Hydro of Canada, is its licensee.

It stressed that TCN licence empowers it 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 dusk 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.

“Parties were consequently issued directives on August 27, 2015, to take remedial actions which they are yet to comply with”, it added.

In separate notices signed by the Deputy General Manager, Enforcement Unit, NERC, 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.


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