Transmission Company of Nigeria (TCN) yesterday disclosed that it would support one of its departments – the Market Operator (MO) to penalise any operators found to have repeatedly failed to abide by the Market Rules guiding operations in Nigeria’s electricity market.
Although it’s not the outright responsibility of the MO to penalise operators in Nigeria’s power market for reported infractions, the MO appeared to have taken over that task from the Nigerian Electricity Regulatory Commission (NERC), and the Managing Director of the TCN, Mr. Usman Mohammed, justified the move at a meeting of the West African Power Pool.
Mohammed stated that the move had become necessary to sanitise the market and rid it of recalcitrant acts.
He explained that the MO being the administrator of the Market Rules would henceforth penalise electricity distribution companies (DisCos), generation companies (GenCos) and even its other department – the Transmission Service Provider (TSP) for falling short of their obligations.
Although he said the MO had not taken over the enforcement responsibility of the NERC in this regard, he explained that backed by the Market Rule to penalise recalcitrant operators, he would work with the NERC to achieve results.
The MO recently cut off some DisCos from the national grid and placed huge financial fines on them for reported market infractions.
“NERC is the regulator and has not complained that what we are doing is wrong. Clearly, when you are enforcing market rule, it means we are following the rule because there is no way you can have a sustainable market without rules.
“The Market Rules show how the market would be governed and in TCN, there is the Market Operator which is in charge of the operations and functions of the market. If the Market Operator cannot enforce the rules to ensure everyone play according to the rule, there is no way we can have a sustainable market. Our effort is to ensure that the market plays by the rules and becomes sustainable,” said Mohammed.
He explained that MO has powers to sanction operators from Section 74 of the Market Rules, adding that even at that, the NERC had not complained about its recent actions and moves to sanitise the market of unruly behaviours.
According to him, “Clearly, we are empowered by law and if not, it will not be possible. They would have taken us to court. There are important documents that govern the operations of the power sector. The first is the EPSRA 2005, the Market Rules and then the Grid Code. They work together and not separate. So, we enforce the Market Rules as they are supposed to be.
“You will see that with its enforcement, very soon, so many benefits will come, because there are things that people take for granted in the past that they will stop taking for granted. People who do things discretionally will stop doing them.”
Asked if the MO was not usurping the powers of the regulator to penalise offenders in the market, Mohammed explained: “NERC is a regulator…In the Market Rules, Section 74 (a and b) signifies that if the Market Operator discovers that there is a DisCo for example that cannot meet its obligations under the market rule, the Market Operator is supposed to petition NERC on that and the regulator will enforce its Business Continuity Regulation to deal with that DisCo accordingly. All these rules are what NERC enforces and we report our enforcements to NERC.
“Even the money for the service provider that we are enforcing now and ensuring the DisCos comply, the NERC, TSP, ISO and NBET are the beneficiaries and once that money goes to NERC, its excess operational expenses goes to the Rural Electrification Agency and everybody benefits from it when we do the right thing.”
He said, going forward, the MO would not spare any DisCo found guilty of breaking the Market Rules.
“If they break the rule, they will be sanctioned just like any other DisCo. They will be sanctioned according to the Market Rules. And don’t forget that the TCN is not the Market Operator, but it (MO) reports to us even though we don’t dictate to it what it does.
“I can tell you that any DisCo or anybody who breaks the rule including the TSP will be sanctioned by the Market Operator,” Mohammed added.