The Market Operator of the Transmission Company of Nigeria, Mr. Ali Ahmad, announced on Friday that the Abuja Electricity Distribution Company has been suspended for not complying with market rules.
The suspension was communicated to AEDC after it was previously notified in writing about its defaults.
Mr. Ahmad explained that AEDC failed to provide an adequate Bank Guarantee, as required by section 15.3.3 of the market rules. He stated, “Despite all notifications, AEDC failed to address the default. In view of this non-compliance, AEDC is hereby suspended from the MO-administered electricity market.”
He added that AEDC was served several notices, including a request for Fulfillment of Prudential Requirement on February 13, a Notice of Event of Default: Non-Fulfillment of Prudential Requirement on March 22, and a Notice of Intent to Issue a Suspension Order: Non-Provision of Adequate Bank Guarantee on April 8, but none were honored.
To remedy the situation, AEDC must provide an adequate Bank Guarantee within five business days from the date of the notice. Mr. Ahmad warned that if AEDC does not resolve the issue within this timeframe, it could be disconnected from the national grid starting on July 28, 2024. This could result in power outages for residents in the Federal Capital Territory, as well as Niger, Kogi, and Nasarawa States.
“The defaulting Market Participant AEDC has been duly notified of their infractions concerning non-compliance with section 15.3.3.a of the Market Rules. Newspaper publication has been made in line with the Market Rules which gives AEDC a deadline of five (5) business days from the date of this publication to remedy its market rules infractions,” he said.
He further stated that if the issue is not addressed within 30 business days of disconnection from the grid, the Market Operator will terminate AEDC’s Market Participation Agreement.
Nigeria’s electricity distribution companies (DisCos) have faced various sanctions from regulators due to non-compliance with industry standards. These sanctions arise from multiple issues, including overbilling unmetered customers and violating the Nigerian Electricity Regulatory Commission (NERC) rules.
Recently, AEDC was fined N200 million for overbilling customers in Band A. This penalty reflects NERC’s commitment to protecting consumer rights. The fine serves as a warning to other DisCos to adhere to fair billing practices and regulatory requirements.
These measures are part of a broader effort to ensure DisCos follow the rules and provide fair services to customers. By imposing fines and sanctions, NERC and other regulators aim to create a more transparent and accountable electricity distribution system.
