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NERC gives TCN seven days to close autonomous bank account

By on September 25, 2015

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.

NERC in the notice which was communicated in a statement from its head of public communication in Abuja, Dr. Usman Arabi, 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.

It noted that the MO’s failure to comply with its directive would attract strict disciplinary action from it.

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

NERC said 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.
According to such earlier notices which were signed by the Deputy General Manager, Enforcement Unit of 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 that, “A licensee shall comply with the provisions of his licence, regulation, codes, and other requirements issued by the Commission from time to time.”

NERC explained that they were also reminded about the content of section 3(1) of the licence conditions which stipulates that, “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, NERC said that 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 the former president made.”

It added that the MO has in this regard been instructed to, “immediately close the subsidiary account, restore the original account to the normal condition of consensual approval and inform the commission accordingly.”

It also asked the MO to continue funding the System Operator with the previously designated amount as paid to other market participants.

 

[ThisDay]