By Seyi Babalola
The Nigerian Electricity Regulatory Commission (NERC) has started the process of dismantling the Transmission Company of Nigeria (TCN), a noteworthy step that has resulted in the establishment of the Nigerian Independent System Operator of Nigeria Limited (NISO).
A joint order issued by Vice Chairman Musiliu Oseni and Chairman Sanusi Garba of the NERC dated April 30, 2023, requires TCN to transfer all market and system operating activities to the newly formed firm.
TCN has previously possessed licenses for system operations (SO) and transmission service provider (TSP) under the Electric Power Sector Reform Act.
However, the enactment of the Electricity Act 2023 provided clearer guidelines for incorporating and licensing the independent system operator (ISO) and for the transfer of assets and liabilities from TCN’s portion of the ISO.
In line with this directive, NERC has instructed the Bureau of Public Enterprises (BPE) to incorporate a private company limited by shares under the Companies and Allied Matters Act (CAMA), 2020, by May 31.
This new entity, named the Nigerian Independent System Operator of Nigeria Limited (“NISO”), will assume the market and system operation functions outlined in the Electricity Act and TCN’s system operation license terms.
NERC emphasized that NISO’s memorandum of association (MOU) will empower the company to manage all assets and liabilities related to market and system operation on behalf of market participants, consumer groups, or specified stakeholders.
Additionally, NISO will be tasked with negotiating ancillary service procurement contracts with independent power producers and successor generation licensees, as well as performing other market and system operation functions outlined in its license.
Overall, NERC expects NISO to fulfill all contractual rights and obligations pertaining to market and system operations previously held by TCN.
This move marks a significant step in the restructuring of Nigeria’s electricity sector, aimed at enhancing efficiency and market performance.
