The Transmission Company of Nigeria (TCN) has warned that several distribution companies may soon be disconnected from the grid due to their failure to comply with market rules.

The TCN has accused the distribution companies of flouting the guidelines governing the Nigeria Electricity Supply Industry, which include payment for ancillary electricity services. The distribution companies, which are the revenue arms of Nigeria’s electricity industry, fund the operations of TCN, the Nigerian Electricity Regulatory Commission, and the Nigerian Bulk Electricity Trading Plc.

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In 2019, TCN disconnected Port Harcourt, Kano, and other distribution companies over their lack of compliance with market rules. Last month, TCN’s market operator accused nine distribution companies, three generation companies, and Ajaokuta Steel Company of non-compliance with market rules and market participation agreements.

Edmund Eje, Head of Market Operation at TCN, stressed that compliance with market rules is essential for the viability and sustainability of the sector. He added that the rules are sacrosanct and must be obeyed by all players in the sector. Failure to comply with the rules is a major factor dealing a disastrous blow to the scalability and growth of the market, Eje said.

He added that all participants sign the market participation agreement, but compliance is often an uphill task for many. TCN has given defaulters notices and time to comply with the rules, and is now embarking on sanctions. Eje warned that partial or complete disconnection of defaulters from their point of connection to the grid may be one of the consequences of the sanctions.

This latest warning from TCN comes only a few days after generation companies threatened to down tools, adding further pressure to Nigeria’s already-strained electricity sector. If the disconnection of distribution companies goes ahead, Nigeria could be plunged into darkness in the coming days.

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The country’s electricity sector has long been plagued by issues such as inadequate investment, poor maintenance, and a lack of regulatory enforcement. The government has tried to address these challenges with initiatives such as the Power Sector Recovery Program (PSRP), which seeks to address financial and operational issues in the sector. However, the sector remains beset by challenges, and it is unclear how the latest developments will affect the already struggling industry.