It’s a ding-dong affair between Aba Power and a Transmission Company of Nigeria’s market operator, with the former contesting its disconnection from the national grid over a debt burden blamed on electricity consumers’ refusal to pay for services in Aba, reports Emmanuel Ugwu-Nwogo
For over two weeks, it has been a ding-dong affair between electricity consumers in Aba Power and service providers. On April 19, 2023 electricity consumers in the nine local governments that make up the Aba Ringfence were thrown into darkness. They would not have bothered if it were the usual power outages that every consumer was accustomed to. But the gloomy cloud of darkness persisted, suffocating businesses and disrupting social activities.
It was only when the management of the APL Electricity Company Limited (APLE) raised the alarm that it had been disconnected from the national grid that it dawned on consumers that they were experiencing an unusual power outage. The problem was indeed bigger than they had imagined.
The TCN-MO said that Aba Power was indebted to service providers and the regulator to the tune of N896,210,059,56 as of the February 2023 billing cycle. This was stated in the letter dated April 19, 2023, with ref no. TCN-MO-003-APL-049-VOL 2-2023, signed by Dr Edmund A. Eje and addressed to the Managing Director/CEO of APL Electric Company Limited.
In the letter entitled ‘Suspension Notice’, the MO alleged that Aba Power not only failed to pay its outstanding debt but had also violated the market rules and failed to take “corrective action” within a specified period as earlier directed. “In this regard, APLE is hereby suspended from the Nigerian Electricity Market (NEM),” the MO said. The Market Operator told Aba Power that the only way out was to “pay all outstanding invoices and provide adequate bank guarantees within 30 business days.” It warned that “if after the 30 business days, these defaults are not cured, the MO will go ahead to terminate your participation in the NEM and escalate your non-compliance to the Commission for the Business Continuity Regulation to click.”
Somehow the MO didn’t have the patience to allow the 30 days grace period to start running before wielding the big hammer against Aba Power. In another letter dated the same April 19, 2023, with ref no.TCN-MO-003-EDTSP-037-Vol 7-2023, the Market Operator notified the Executive Director of TCN about Disconnection Order MO-DO/TCN/002/2023 issues against “defaulting market participants, including APLE”. It said that affected companies “have been duly notified of their infractions with respect to their outstanding debts to the Market Operator.” At midnight of Friday, April 2, 2023, the Aba Transmission Substation located in the Port Harcourt Transmission Region was severed from the national grid.
The outage sparked outrage. Aba Power was furious, its customers were enraged. Civil society groups and human rights organisations all rose in total condemnation of the action of the TCN-MO which was
The Civil Liberties Organisation (CLO), Nigeria’s foremost human rights group, outrightly condemned the disconnection of Aba Power from the national grid. In a statement the Southeast zone of the rights group decried the outage in Aba, describing the action of the TCN-MO as “a siege on Aba Power” and an attempt to compromise national security. The Southeast CLO in the statement signed by the zonal head, Comrade Aloy Attah, noted that the Market Operator was discriminatory in its handling of the Aba Power issue.
“All the other 11 Discos established since 2013 are owing far greater amounts, yet none has been subjected to this treatment because the Federal Government understands the far-reaching implications of putting any part of the country in complete darkness even for a day”, the Southeast CLO argued.
The CLO further pointed out that it was never the intention of the federal government that any part of the country should be plunged into darkness hence it has been subsidising the Discos “with a fortune, despite being private entities”. The organisation said that in 2022 alone the Federal Government subsidised the distribution companies with as much as N120 billion.
The Aba Landlords Protection and Development Association (ALPADA) cried out over the devastating effect of the power outage on the economy and lives of residents of Enyimba City. The President-general of ALPADA, Chief Alphonsus Udeigbo said at a press conference in Aba that the TCN-MO was deliberately sabotaging the economy of the Southeast zone. He estimated that the commercial city had lost over N30 billion due to the power outage while lives could have been lost at health facilities where life-saving machines were compromised.
Udeigbo demanded that TCN should reconnect Aba Power to the national grid without further delay, warning that the 20,000 member-strong association would peacefully occupy the transmission station of TCN at Alaoji, Aba if the Market Operator failed to lift the Disconnection Order MO-DO/TCN/002/2023 within 24 hours.
Despite the avalanche of criticisms and condemnations poured on the TCN-MO, nobody disputed its right to exercise its regulatory powers and punish defaulters. The problem was the timing, gravity and apparent contradictions in the manner Aba Power was punished. According to ALPADA, “the timing (of the disconnection) is bad. It affects both the outgoing and the incoming administration in Abia. Aba has lost over N30 billion since the disconnection.”
Both TCN and MO appear unruffled, insisting that their actions were in tandem with laid down rules and regulations. Dr Eje, the Market Operator, in a statement stoutly defended his action, saying that indiscipline was rife in the electricity distribution sector hence the need for firm enforcement of the rules in order to ensure optimal growth and sustainability. “NESI(Nigerian Electricity Supply Industry) market indiscipline is one of the major factors dealing a disastrous blow to the scalability and growth of the market,” Eje lamented, adding that even though the Market Participation Agreement (MPA) is signed by all participants, complying with the terms of the agreement has always been a problem.
On its part, the TCN stood by the Market Operator, insisting that there was no need to treat market defaulters with kid gloves. In a statement, the TCN’s General Manager, Public Affairs, Mrs. Ndidi Mbah justified the disconnection of Aba Power on the ground that the disco had breached the market rules.
According to her, the Market Operator was conscious of the need to ensure the continued sustenance of the NESI, which requires strict adherence to market rules and the application of sanctions where necessary.
The TCN spokesperson said that Aba Power was given adequate notice before the clampdown, adding that the MO first sent a request for a bank guarantee to APLE on Nov. 29, 2022, and followed up with a Notice of Event of Default issued on Dec 7, 2022.
She said: “Following the notice of event of default, a Notice of Intent to Issue a suspension order was issued on December 14, 2022, based on the Market Rules.
“APLE requested a hearing which was held online on December 20, 2022, where APLE was given an opportunity to show just cause why it should not be issued a Suspended/Disconnected Order.
“After the hearing, a 14-business day notice was issued on March 21 in three national daily newspapers (Daily Trust, Guardian & THISDAY) as required by the Market Rules. Thereafter, a suspension order was issued on April 19, which required APLE to cure its defaults”.
Aba Power never disputed its indebtedness. It only demanded adequate time and flexibility on issues of debt payment given the myriads of problems confronting it within its short period of coming into existence. Aba Power and its parent company, Geometric Power only took full management of the Aba Ringfence in September 2022 after nine years of legal battle with the Enugu Electricity Distribution Company (EEDC). As part of the settlement, Geometric paid $26 million to EEDC in order to retake the Aba Ringfence.
The Chairman of Geometrics, Professor Barth Nnaji said that his firm signed a memorandum of understanding on February 16, 2023 “in order to retake Aba that rightfully belongs to us”. He added that Geometric was made to pay 200 per cent of the amount EEDC had paid for the acquisition of the Aba area. Geometric has also said that in the last six months, it had paid N440m to Federal Government agencies in the power sector. And just on Friday, April 21, 2023, the firm coughed out N120 million before it was reconnected to the national grid by the TCN after 10 days of a power outage.
Presently Geometric has not started generating power. Its plant located at Osisioma Industrial Layout is expected to be inaugurated in June after which it would commence power generation for its Ringfence. In the interim Aba Power buys electricity from the Niger Delta Power Company (NDPC).
While both Geometric and Aba Power are indebted to creditors, they are also being weighed down by huge debts owed by customers. Geometric is owed N2 billion while Aba Power is owed N4.2 billion by consumers in Aba Ringfence, making a total of N6.4 billion.
The Chief Commercial Officer, of Aba Power, Blessing Ogbe said it has been a tough task making consumers pay their electricity bills. This has a telling effect on the company’s revenue generation and its capacity to meet its obligations to its creditors. In a statement signed by the Head of Operations, Mr. Canice Emeka Obi, Aba Power lamented the adverse effects the attitude of its customers was having on the company.
“Rather than pay for the power they consume, communities, groups, businesses and individuals in the Aba Ringfence chose to not only owe for several months but engage in power theft, meter bypassing, vandalism against the power distribution infrastructure and assaults against Aba Power staff carrying out their legitimate duties”.
According to Obi, only 40 per cent of businesses and individuals in the Aba Ringfence pay what they should, while many electricity consumers bluntly refuse to pay for power consumed. Nonetheless, the embattled company assured its customers that it remains committed to achieving its goal of interrupted power supply in its franchise area.