FG Unbundles TCN, Hands National Grid To New Company

Posted on May 3, 2024

A fresh order by the Nigerian Electricity Regulatory Commission (NERC) will, in the next 30 days, create the Nigerian Independent System Operator of Nigeria Limited (NISO), leading to a split of the Transmission Commission of Nigeria (TCN).

The order, marked NERC/2024/45, dated 30 April and signed by the Chairman/CEO, NERC, Sanusi Garba and Vice Chairman, Musiliu Oseni, respectively, stated that within 30 days, the TCN shall conclude the identification and mapping of the assets and liabilities for the system/market operation portion of its business and forward same to the Commission and the Bureau of Public Enterprises (BPE) no later than 30 June 2024.

The BPE shall then, through the National Council on Privatisation, conclude the transfer of all the market and system operation assets and liabilities held by TCN to NISO.

The new system operator, NISO, will be directly in charge of the network, especially the troubled national grid and other related market contracts controlled from Osogbo.

By implication, NERC has withdrawn one of the two operating licenses held by TCN, which allows it to function as a Transmission Service Provider and an Independent System Operator.

As stipulated in the Electricity Act (EA) 2023, NERC directed the BPE to “incorporate, no later than 31 May 2024, a private company limited by shares under the Companies and Allied Matters Act to carry out the market and system operation functions stipulated in the EA, 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”).

“The object clause of the Memorandum of Association of the NISO, as provided in section 16 subsection two of Electricity Act, 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 order stated.

NISO would be expected to carry out all market and system operation-related contractual rights and obligations novated to it by the TCN while negotiating and entering into contract for the procurement of ancillary services with independent power producers and successor generation licensees, among other activities.

It would also carry out market and system operations functions as specified under the Electricity Act and the terms of its license in the interest of market participants and system users.

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