A Review of the Nigerian Energy Industry

NERC gives TCN seven days to shut down unilateral account

*Power transmission tower.
*Power transmission tower.

Oscarline Onwuemenyi

24 September 2015, Sweetcrude, Abuja – In an act which underlines it’s recent commitment to ensure enforcement of its regulations, the Nigerian Electricity Regulatory Commission (NERC) has issued a notice to the Transmission Company of Nigeria (TCN), indicating its desire to commence enforcement actions on its Market Operator (MO) department for operating an autonomous bank account.

In the notice which was communicated in a statement from its head of public communication in Abuja, Dr. Usman Arabi, NERC gave the erring MO a seven-day ultimatum to take remedial actions by winding down its operation of the unilateral bank account and report compliance to it.

The agency stressed that the MO’s failure to comply with its directive will attract strict disciplinary action from it.

The MO is a division of the TCN and it issues market settlements and invoices due to the market participants and service providers in the Nigerian Electricity Supply Industry (NESI). TCN is also under contract management of Manitoba Hydro of Canada, and a licensee of NERC.

NERC however explained that TCN’s licence empowers it to manage the MO and the System Operator (SO) which is responsible for the wheeling of electricity from electricity generation to distribution companies.

It noted issues arose when at the end of the immediate past administration, the federal government appointed some staff in the MO division as a separate management and TCN in response removed names of the elevated staff from its payroll.

NERC said that the MO which incidentally partly manages cash flow in the electricity market reacted by opening a separate bank account other than the one known to TCN and that the matter was subsequently brought before it at its August 19, 2015 regulatory meeting.

It stated that parties were consequently issued regulatory directives on August 27, 2015, to take remedial actions which they are yet to comply with.

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