The Nigerian Electricity Regulatory Commission (NERC) has unbundled the Transmission Company of Nigeria (TCN) and instead created the Nigerian Independent System Operator of Nigeria Limited (NISO).
NERC revealed this development in an April 30, 2023 Order, jointly signed by NERC Chairman, Sanusi Garba, and Vice Chairman, Musiliu Oseni.
TCN was a Federal Government-owned electric utility company in Nigeria established in 2005.
It was among the 18 companies unbundled from the Power Holding Corporation of Nigeria (PHCN) during the tenure of President Olusegun Obasanjo in 2005.
PHCN’s unbundling was backed by the Electric Power Sector Reform Act (EPSR Act), and created six generation companies (GenCos) and 11 distribution companies (DisCos).
The company was formed by the government to ensure better coordination of electricity transmission.
By this April order, TCN will transfer all market and system operation functions to the new NISO.
The commission had previously issued transmission service provider (TSP) and system operations (SO) licences to TCN, in accordance 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), 2020.
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 would implement all market and system operation-related contractual rights and obligations handed over by TCN.
