The Transmission Company of Nigeria (TCN) says it has issued a 14-day suspension notice to Ajaokuta Steel Company Limited (ASCL) for non-compliance with provisions of its market rules.
Speaking in a statement on Wednesday, signed by Edmund Eje, the market operator, the TCN said ASCL had accrued a debt totaling N33.71 billion as of November 2023.
“As of the November 2023 billing cycle, ASCL has accumulated a total outstanding debt of N33,071,002,129.49 (Thirty-Three Billion, Seventy-One Million, Two Thousand, One Hundred and Twenty-Nine Naira, Forty-Nine Kobo), comprising N30,849,749,981.01 for energy and capacity delivered by Nigerian Bulk Electricity Trading PLC (NBET) and N2,221,252,148.48 owed to service providers,” the statement reads.
“On the 20th of March 2023, the MO issued a notification to Ajaokuta Steel Company Limited (ASCL) for the non-compliance with the Market Rules and requested corrective actions within a specified period, as advertised in three national newspapers (The Nation, Daily Sun, and This Day).”
According to TCN, despite interventions by the minister of power, which stopped enforcement actions to give ASCL a chance to rectify its defaults, the non-compliance remains unresolved.
“To avoid disconnection, TCN said, ASCL is required to settle all outstanding invoices and provide an adequate “bank guarantee of N70,177,727.39 for MO’s invoice and N320,000,000.00 for NBET’s invoice, within fourteen [14] days from the date of this notice.”.
“Failure to rectify these defaults within the specified period will lead to the disconnection of ASCL’s network from the National Grid, in accordance with Section 45 of the Market Rules,” TCN said.
“Furthermore, should the defaults still remain unresolved after 30 business days of disconnection, the market operator will proceed to terminate ASCL’s market participation agreement and escalate the non-compliance matter to the Nigerian Electricity Regulatory Commission (NERC) for Business Continuity Regulation to commence.”
In its 2022 annual report, the NERC had hinted at disconnecting Ajaokuta Steel from the national grid over a gross indebtedness of N25.06 billion.
TCN TO DISCONNECT APL ELECTRIC FROM NATIONAL GRID OVER N10.95BN DEBT
Meanwhile, issuing a similar suspension notice to APL Electric Limited, Aba, TCN said in the November 2023 billing cycle, the company accumulated a total outstanding debt of N10.951 billion.
According to the TCN, the debt includes N1,595,417,124 payable to service providers and N9,356,043,543 for energy and capacity provided by Niger Delta Power Holding Company (NDPHC).
The transmission firm said to avoid disconnection, APL Electric must settle all outstanding invoices and provide a bank guarantee of “N331,222,149.10 for MO’s invoices and N3,000,000,000.00 for NDPHC’s invoice, within fourteen [14] days from the date of this notice”.
“Failure to rectify these defaults within the specified period will lead to the disconnection of APL Electric’s network from the National Grid, in accordance with section 45 of the Market Rules,” the TCN said.
TCN also said it will terminate APL Electric’s market participation agreement and escalate the non-compliance matter to NERC for business continuity regulation, if defaults persist after 30 business days of disconnection.