THE Nigerian Electricity Regulatory Commission (NERC), has officially unbundled the Transmission Company of Nigeria (TCN) into two entities – the Nigerian Independent System Operator Nigeria Limited (NISO) and the Transmission Service Provider (TSP).
NERC communicated this in a circular dated April 30th 2024 jointly signed by the Chairman of NERC Sanusi Garba, and the Vice Chairman, Musiliu Oseni, which was made available to the newsmen on Friday, May 3, 2024.
According to the statement, TCN transfers all market and system operation responsibilities to the newly formed entity. Earlier, the commission had granted TCN transmission service provider (TSP) and system operations (SO) licenses by the Electric Power Sector Reform Act.
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NERC stated that the Order will come into effect on May 1, 2024, and will remain valid until modified or annulled by a subsequent Order issued by the Commission.
The Transmission Company of Nigeria Plc (TCN) as a successor company was issued two separate licences to operate as the transmission service provider and system operator for the national grid system by the Commission.
“The repealed Electric Power Sector Reform Act 2005 (EPSRA or the Repealed Act) envisaged that TCN would transfer the function of system operation for the national grid to an Independent System Operator (ISO).
“The Electricity Act (the EA or Act) 2023 came into effect on 9 June 2023 and this piece of legislation went beyond the Repealed Act by providing clearer guidelines for the incorporation, governance structure, and licensing of the ISO, as well as the transfer of the assets and liabilities of the system operations portion of TCN to the ISO.” The statement read in part.
As a result, the commission mandated in the circular that the Bureau of Public Enterprises (BPE) incorporate a private company limited by shares under the Companies and Allied Matters Act (CAMA) on May 31 2024 without fail.
The statement noted that the corporation 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 stated.
The electricity regulator added that the company will 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, citing the Electricity Act’s object clause in the NISO’s memorandum of association (MOU).
According to the commission, the new ISO would also be in charge of negotiating and signing contracts with licensees of successor generation and independent power producers for the acquisition of ancillary services.
Additionally, it will typically execute its licencing requirements and the Electricity Act’s market and system operations duties in the best interests of system users and market players.
In 2022, The ICIR reported that the frequent grid collapse was attributed to the delay in unbundling of the Transmission Company of Nigeria (TCN) by the Federal Government.
Fatimah Quadri is a Journalist and a Fact-checker at The ICIR. She has written news articles, fact-checks, explainers, and media literacy in an effort to combat information disorder.
She can be reached at sunmibola_q on X or fquadri@icirnigeria.org