NERC Unbundles TCN, Establishes New System Operator

The Nigerian Electricity Regulatory Commission (NERC) has unbundled the Transmission Company of Nigeria (TCN).

The commission made this known in a circular dated April 30, 2023, and jointly signed by its Chairman, Sanusi Garba, and Vice Chairman, Musiliu Oseni, respectively.

NERC said following the unbundling of the TCN, it has established the Nigerian Independent System Operator of Nigeria Limited (NISO). It noted that by this order, TCN is expected to transfer all market and system operation functions to the new company.

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.

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

“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.”

NERC said the new ISO 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.

The Commission added that 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.