The Nigerian Electricity Regulatory Commission (NERC) has directed the Transmission Company of Nigeria (TCN) to transfer assets and liabilities related to system operations to the newly formed Nigerian Independent System Operator of Nigeria Limited (NISO). This is in line with the new Electricity Act (EA) 2023, which aims to promote efficiency and competition in the electricity sector.
The TCN, currently a wholly government-controlled entity, has three functional departments: the Transmission Service Provider (TSP), the Market Operator (MO), and the System Operator (SO). The System Operator, which has been subsumed under the TCN, controls the physical operation of the electricity system, including managing the transmission grid lines, ensuring reliability, and maintaining the grid’s technical stability.
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According to NERC’s Order, signed on April 30 by its Chairman, Sanusi Garba, and Vice Chairman, Musiliu Oseni, the TCN is expected to transfer assets and liabilities related to system operations to NISO by June 30, 2024.
The Order states, “This Order seeks to…mandate TCN to comply with the provisions of the EA on the incorporation of the ISO and provide clear directives to TCN to incorporate the ISO.”
The Explainer learnt that the new entity, NISO, will hold and manage all assets and liabilities pertaining to market and system operation on behalf of market participants and consumer groups. NERC emphasized that NISO will carry out all market and system operation-related contractual rights and obligations novated to it by the TCN, including negotiating and entering into contracts for the procurement of ancillary services with independent power producers and successor generation licensees.
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The initial subscribers of NISO are the Bureau of Public Enterprises (BPE) and the Ministry of Finance Incorporated (MOFI), with the final shareholding structure to be determined after further consultations with government, market participants, and industry stakeholders.
NERC also stipulated that every person employed by TCN to perform market and system operations immediately before the transfer date shall be transferred to the service of NISO on terms not less favorable than those enjoyed by them immediately prior to their transfer.
