The Transmission Company of Nigeria (TCN) is undergoing an unbundling process as the Nigerian Electricity Regulatory Commission (NERC) introduces the Nigerian Independent System Operator of Nigeria Limited (NISO).
An Order dated April 30, 2023, signed jointly by NERC Chairman, Sanusi Garba and Vice Chairman Musiliu Oseni, mandates TCN to transfer all market and system operation functions to the newly established NISO.
Prior to this development, TCN held transmission service provider (TSP) and system operations (SO) licenses in alignment with the Electric Power Sector Reform Act.
With the enactment of the Electricity Act 2023 came clearer guidelines for the incorporation and licensing of the independent system operator (ISO) and for the transfer of assets and liabilities from TCN to the ISO.
Following 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.
The new entity, named Nigerian Independent System Operator of Nigeria Limited (“NISO”), will take on the market and system operation functions outlined in the Electricity Act and TCN’s system operation license terms.
NERC underlines that NISO’s memorandum of association (MOU) will authorize the company to oversee all assets and liabilities concerning market and system operation for market participants, consumer groups,, or specified stakeholders.
Furthermore, NISO will be responsible for negotiating ancillary service procurement contracts with independent power producers and successor generation licensees, as well as carrying out other market and system operation functions as specified in its license.
Overall, NERC is counting on NISO to honor all contractual rights and obligations related to market and system operations previously held by TCN.
This development is a significant stride in the restructuring of Nigeria’s electricity sector, with the objective of improving efficiency and market performance.