EKO EDC SUSPENSION ORDER PDF Print E-mail
Written by Market Operator   
Saturday, 08 June 2019 07:32

TRANSMISSION COMPANY OF NIGERIA (TCN)

INDEPENDENT SYSTEM OPERATOR

ORDER NO: TCN/ISO/MO/2019/001

BEFORE THE MARKET OPERATOR, INDEPENDENT SYSTEM OPERATOR, TRANSMISSION COMPANY OF NIGERIA

IN THE MATTER OF NON-COMPLIANCE WITH THE CONDITIONS OF MARKET RULES AND MARKET PARTICIPATION

AGREEMENTS.

WHEREAS:

1. Eko Electricity Distribution PLC (EKEDC) and the Independent System Operator, on behalf of the Market Operator, entered into a Market Participation Agreement on the 21st of January, 2015.

2. In the signed Market Participation Agreement, EKEDC agreed to at all times be compliant with the provisions of Clause 3.2 reproduced below:

· The Participant shall in accordance with the provisions of the Market Rules, Grid Code, Metering Code and the Market Procedures be compliant at all times, particularly by:

i. Providing metering information in a timely manner and in the approved format in accordance with the Metering Code and the market procedures.

ii. Security Deposit when so required of an amount established by Market Operator to serve as a form of guarantee of payment for all amounts due from the Participant to the Market Operator.

iii. Settling in a timely manner any payment due

3. EKEDC failed to maintain a security in respect of Section 15.3.2 of the Market Rules, thereby breaching Section 45.3.1(d) of the Market Rules which is reproduced below: 45.3.1 This Rule 45.3 shall apply to any Participant in respect of which any of the following Events of Default have occurred if:

(d) the Participant fails to renew the Security Cover required from each Participant under these Rules within the time specified in that regard by the Market Operator;

4. EKEDC was notified of the default of Market Rules 45.3.1 (d) via a NOTICE OF EVENT OF DEFAULT (NED/2019/001) dated May 24, 2019. It was required to remedy the default in line with Section 45.3.3 of the Market Rules which states that 45.3.3 Where an Event of Default has occurred in relation to a Participant, the

Market Operator shall:

(a) issue to the Participant a Default Notice specifying the alleged default and

requiring the Participant to remedy the default within such time as may be specified in the Default Notice, which time shall not be more than the longer of:

(i) 5 days; or

(ii) 2 Business Days; and / or

(b) make a claim upon the Security Cover maintained by the Participant for such amount as the Market Operator determines represents the amount actually owed by the Participant to the Market Operator, or which forms its contingent liability to the Market Operator under these Rules and the Grid Code.

5. The Event of Default of Section 45.3.1 (d) committed by EKEDC could have been remedied by applying the dictates of Section 45.3.5 (b) of the Market Rules which states that:

45.3.5 A Participant may remedy an Event of Default referred to in Rule 45.3.1, where the Default Notice relates to payment of amounts due to the Market Operator under these Rules, including Rules 45.3.1(b) to 45.3.1(d), 45.3.1(h) and 45.3.1(i) to 45.3.1(n), as follows:

(a) by paying all monies due for payment by it under these Rules and the Grid Code, together with any Default Interest calculated in accordance with Rule 38.11 and any costs and expenses determined by the Market Operator to have been incurred by it by reason of the default; and

(b) by providing additional Security Cover which complies with the requirements of Rule 15.3.3.

6. Market Rules 45.3.7, produced below, dictates what should happen to participants that do not remedy their Event of Default within the time stated in the Default Notice letter written to participant:

45.3.7 If an Event of Default is not remedied within the time specified in the Default Notice or within such longer period as may be agreed to in writing by the Market Operator, the Market Operator may issue to the Participant, with a copy to the Transmitters and Distributors to whose systems the Participant is connected, a notice indicating its intention to issue:

(a) a Suspension Order to the Participant, suspending or restricting all or any of the Participant's rights to participate in the Market Operator Administered Market; or

(b) the Suspension Order referred to in paragraph (a) and a Disconnection Order to TSP or any other Transmitter, or Distributor to whose Transmission System or Distribution System the Participant is connected, directing the disconnection of the relevant Facilities or equipment of the Suspended Participant;

7. In line with Section 45.3.7 of the Market Rules EKEDC was issued a “Notice of Intent to Issue Suspension Order (NIISO/2019/001)” dated May 31st , 2019 indicating the intention of the Market Operator intention to suspend EKEDC from the Market Operator Administered Market and restrict some of its rights in the Market Operator Administered Market. EKEDC was also reminded of its right pursuant to Section 45.3.8 to request a hearing before the Market Operator to show cause why the Market Operator should not issue a Suspension Order or Disconnection Order against it.

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Last Updated on Saturday, 08 June 2019 21:09
 

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