JUST-IN: NERC Unbundles TCN, Constitutes New System Operator

• NERC said the company is expected to carry out all market and system operation-related contractual rights and obligations handed over by TCN.
• 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. 

Following the establishment of the Nigerian Independent System Operator of Nigeria Limited (NISO), the Nigerian Electricity Regulatory Commission (NERC) separated the Transmission Company of Nigeria (TCN).

In an order signed by vice chairman Musiliu Oseni and chairman Sanusi Garba jointly on April 30, 2023, NERC made this public.

This ruling requires TCN to provide the new business full control over all market and system operation functions.
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 is expected to carry out all market and system operation-related contractual rights and obligations handed over by TCN.