NERC Threatens Market Operator, TCN Over Unilateral Bank Account | Independent Newspapers Limited
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NERC Threatens Market Operator, TCN Over Unilateral Bank Account

Posted: Sep 24, 2015 at 12:45 am   /   by   /   comments (0)

By Oladunjoye Phillip,


The Nigerian Electricity Regulatory Commission (NERC) said it has issued Notices of Commencement of Enforcement Action on the Market Operator (MO) for operating a unilateral bank account.

The notice, which the commission said was served on Monday, 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 would face disciplinary action from the commission.

MO, it explained, 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), adding that TCN, which is currently under contract management of Manitoba Hydro of Canada, is a licensee of NERC.

NERC noted 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.

The commission explained that 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.

It said 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, saying that the matter was subsequently brought before the commission at its August 19, 2015 regulatory meeting.

NERC said the two parties were consequently issued directives on August 27, 2015, to take remedial actions, which they are yet to comply with.

It noted that in separate notices signed by the Deputy General Manager, Enforcement Unit, NERC, Mr. Chijioke Obi, the 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.”

It said that the two parties 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.”

NERC said TCN was specifically 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 of former president is made.”

It noted that the Market Operator was also directed to, “Immediately close the subsidiary account, restore the original account to the normal condition of consensual approval and inform the commission accordingly.”

NERC added that Market Operator was also directed to: “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.