NERC unbundles TCN, forms Nigerian Independent System Operator

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The Nigerian Electricity Regulatory Commission (NERC) has announced the unbundling of the Transmission Company of Nigeria (TCN), forming the Nigerian Independent System Operator of Nigeria Limited (NISO).

This decision was communicated via a circular dated April 30th.

Under this move, TCN will delegate all market and system operation responsibilities to the newly established entity.

Previously, NERC had granted transmission service provider (TSP) and system operations (SO) licenses to TCN, aligning with the Electric Power Sector Reform Act.

However, the Electricity Act 2023, which came into effect on June 9, provided clearer guidelines for the incorporation and licensing of the independent system operator (ISO), as well as the transfer of assets and liabilities of TCN’s portion of the ISO.

Therefore, in the circular, the commission ordered the Bureau of Public Enterprises (BPE) to incorporate, unfailingly on May 31, a private company limited by shares under the Companies and Allied Matters Act (CAMA).

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The company, NERC said, is expected “to carry out the market and system operation functions stipulated in the Electricity Act and the terms and conditions of the system operation licence issued to TCN”. 

“The name of the company shall, subject to availability at Corporate Affairs Commission, be the Nigerian Independent System Operator of Nigeria Limited (“NISO”),” NERC said.  

Citing the object clause of the NISO’s memorandum of association (MOU) as provided in the Electricity Act, NERC said the company shall “hold and manage all assets and liabilities pertaining to market and system operation on behalf of market participants and consumer groups or such stakeholders as the Commission may specify”. 

The new ISO, the commission said, will also be responsible for negotiating and entering into a contract for the procurement of ancillary services with independent power producers and successor generation licensees.

Also, it will generally carry out market and system operations functions as specified under the Electricity Act and the terms of its licence in the interest of market participants and system users.

NERC said the company is expected to carry out all market and system operation-related contractual rights and obligations handed over by TCN.