More details have emerged on why the needed progressive investments in the nation’s electricity sector had reduced to snail speed in the last couple of years, thus fueling regular collapse of national grids and nationwide blackouts from time to time.
In a viral video interview posted on the Twitter handle of the Transmission Company of Nigeria (TCN), the Market Operator (MO), Mr Edmund Eje, said “Power distribution companies owe service providers, including the TCN, a total of N263bn”.
Business Hilights recalls whereas that the Transitional Electricity Market (TEM) started since 2015 to coordinate power trading activities, partnering service providers in the power sector include Nigerian Electricity Regulatory Commission (NERC), the Nigerian Bulk Electricity Trading (NBET) Plc, the Transmission Service Provider (TSP), the System Operator (SO) and the MO.
Though the TSP, SO and MO are different arms of the TCN, which manages the national grid. The Market Operator, Mr. Edmund Eje, in a video interview posted on the Twitter handle of the TCN, noted that “One of the major conditions for TEM is that the distribution companies will post letters of credit or guarantee to the market operator and the market operator will rest on these letters of credit.
“Assuming a Disco short pays its invoice, the market operator will fall back on this letter of credit. From 2015, the transactions concerning energy and capacity were handed over to the NBET, and then what was left for the market operator, apart from all market administration processes, is services payment. According to him, the service payment involves the service charge, which the market operator collects from the Discos.
Eje explained further that “When TEM commenced, the Discos didn’t comply with this in the first and second months; an attempt was made to fall back or to have recourse to the letter of credit. The Discos went to court, obtained an injunction and stopped both NBET and the market operator from having their way.”
Industry analysts have continued to link poor state of infrastructure in Nigeria’s power sector to debt hangover that have been hobbling key players.
