KEDCO Rattles TCN Over N3.2bn Judgment Debt

The Transmission Company of Nigeria (TCN) is under intense pressure to pay Kano Electricity Distribution Company (KEDCO) a judgment debt running to N3.2bn.
The development is sequel to an arbitration midwifed by the Nigeria Electricity Regulatory Authority (NERC) following some infractions on the side of TCN on power supply.
The statement signed by KEDCO’s Head of Corporate Communications Alhaji Ibrahim Sani Shawai which was obtained by Economic Confidential in Abuja notes that TCN erred in law by allocating between 5 and 6 percent power to KEDCO instead of the 8% approved by Multi-Year tariff Order(MYTO), a development that clearly breached extant laws of the regulatory authority(NERC).
Economic Confidential is aware that Kano Electricity Distribution Company (KEDCO) has the capacity to increase the LC to meet the Transmission Company of Nigeria (TCN) target according to the rules, but KEDCO decided not to in view of certain rules and regulation emanating from the regulatory authority.
By law, TCN is supposed to supply power to KEDCO at 8% as approved by MYTO allocation but that was not achieved, as maximum of only 5% to 6% was received from the grid, where the shortfall constituted part of its revenue requirement as an entity.
According to the statement, the Nigerian Electricity Regulatory Commission (NERC) has passed a judgement on Sept. 27, 2016 based on Market Rule directing TCN to credit KEDCO with the sum of N3.2billion for imbalance compensation and wrong meter readings from TCN respectively from their mistakes and infractions where KEDCO was over invoiced for other DisCos’ energy consumption.
The N3.2billion comprises of an imbalance of N2, 390, 310,793.83 billion between January 2015 and June 2015 and the wrong meter reading is put at N858 million. This put together was the amount that NERC directed TCN to credit KEDCO since the verdict was given in 2016. However the processes that culminated to the verdict actually started in 2014. This has been a long battle and victory given but yet to be enjoyed by KEDCO and it is said that justice delayed is justice denied.

The N3.2bn would have yielded good interests since 2016 if it had been given to KEDCO for its investment in the power distribution franchise.
This is a judgement that for more than three years is yet to be obeyed. If the market in the power sector is rule-governed, there should be no reason for TCN not to obey the judgement even when they are so quick to issue out suspension to KEDCO because it is within their purview to do so. This is an abuse of power and an attempt to bully KEDCO. The failure to obey the judgement by TCN which is yet to pay KEDCO the sum of N3.2b for the mistakes made by TCN will either mean that the mistake by TCN in providing a shortfall of 5% to 6% power supply from the grid and using 8% as a revenue requirement from KEDCO was deliberate or that there is more to it than meets the eye for them to persistently continue to choose not to obey yet forcing KEDCO to obey 100 per cent payment.
“TCN’s action of not wanting to take responsibilities for their actions in favour of KEDCO is a trend that must not be nursed in the market operation because he that comes to equity must come with clean hands”.

The N3.2 b is more than enough to pay the LC charges levied on KEDCO.
With the huge MDA debts not yet paid for years and it continues to accumulate on monthly basis where its wheeling charges are demanded in full by Market Operator as this led to KEDCO’s suspension from the market by market operator and punishment meted on our customers.
The attitude of TCN is very unbecoming; it portrays it as being disobedient to the rule of law. The issue of KEDCO not meeting the LC demand is before the court of law because KEDCO is contesting it and in the light of that KEDCO had remained silent in that regard as a law abiding organisation, while TCN is busying exploring all avenues to give KEDCO a bad name for which purpose, only TCN can tell. The danger of TCN’s action is that if they cannot obey judgement of over 3 years now specifically September 27, 2016, where lies the hope that they would obey future judgements. This is one trend that can give a bad precedence. No punishment or penalties for TCN on stranded energy while KEDCO pays for capacity charges on generating plants.

This is nothing but mischief and an attempt to gag KEDCO despite the fact that the case is before the court of law. KEDCO decided to keep mum on the issues but for the purpose of record keeping as well as the need to put things in its right perspectives, it has decided to break the silence by responding to the main issue published on Daily Trust that KEDCO failed to remit 100 % of ancillary services payment for May and June respectively, reporting that KEDCO only paid 326.9m and N315.8m respectively which constitute 50% for each month. According to the TCN, KEDCO was suspended on these two grounds and went on to disconnect two feeders.
Analytically, the same MO rule guides both TCN and KEDCO and the Sept. 27 judgement is also part of the MO rules which the TCN violated and yet they are turning a blind eye to the judgement. If KEDCO was over invoiced for other DisCos’ energy consumption; then it is only logical to say that the N3.2 billion KEDCO’s money is with TCN and no actions or punitive measures taken on TCN based on the same MO rules yet TCN is busy disconnecting and media-gagging KEDCO for their own money which is less than one sixth of KEDCO’s money in their possession. It is because of this issue that KEDCO refused to pay.
Charity, they say begins at home, let TCN show a good example by remitting to KEDCO its N3.2 billion or remove the LC guarantee requirement and return the balance to KEDCO to show that the same MO rules guides everyone after all no one can be a judge over obedience when such a person’s obedience is not complete.
Regarding the allegation by the Independent System Operation that KEDCO reduced electricity supply to customers by closing many feeders, listing the Daura Feeder is not true. Power outages affecting Katsina and Daura are as a result of multiple faults on both the Kano and Katsina 132KV lines and the 150MVA T4A power transformer respectively. These faults occur concurrently affecting normal flow of power supply to the affected customers which we have cleared the air on but the persistent alarm through sustained publicity on the issue, speaks more of politics than business. This is not deliberate and the undue politicisation of such issue can only show how desperate TCN is to take the reputation of KEDCO to the mud. This is business and not politics and the balance must be kept in that regard.
On the other hand, the disconnection of Zaria and Club road 33KV feeders by TCN is a deliberate move to hurt our esteemed customers and not KEDCO head office as claimed by TCN. These two feeders before now are serving 14 no 11KV feeders across our network. As a customer centric company, KEDCO had to devise a means of serving these customers through other routes. This alternative measures has affected the normal flow of power supply and the resultant rationing of supply by our system operations unit; yet we are being questioned by TCN through Daily Trust publication on why we are rationing and not supplying power but the question for them is that when the disconnected feeders were intact and functioning, did anyone make such complaint? No. So if the issue raised only came up when TCN disconnected the feeders, then I think TCN should not complain about the problems they triggered.
KEDCO is a business venture that is primarily concerned with customers’ satisfaction and as well as the satisfaction of other stakeholders but in a situation whereby KEDCO is working hard to meet up on all these commitments, KEDCO should not be trodden upon and left to bleed with the over N10billion uncollected bills from its customers from January to July this year and the N3.2bliion which TCN is refusing to pay for over 4 years; KEDCO is out of patience and needs this money to give our customers more packages of satisfaction.