The Nigerian Electricity Regulatory Commission (NERC) has taken action under the Nigeria Electricity Act. It has directed establishing an Independent System Operator (ISO) to assume the Transmission Company of Nigeria (TCN) market and system operations responsibilities.
This directive, outlined in an official order signed by the Chairman and Vice Chairman of NERC to TCN, mandates the incorporation of a new entity. The TCN must transfer its system operations license, assets, and liabilities to this new entity.
Despite this transition, TCN will maintain its transmission service provider license. It will continue managing power transmission infrastructure nationwide.
The Bureau of Public Enterprise (BPE) has been tasked with incorporating the new company, Nigerian Independent System Operator of Nigeria Limited (NISO), by May 31, 2024.
According to the order:
- BPE must establish a private company by May 31, 2024, to perform market and system operation functions.
- TCN must identify and document assets and liabilities for system/market operations by June 30, 2024.
- BPE, through the National Council on Privatization, will oversee the transfer of all relevant assets and liabilities from TCN to NISO.
The new company’s shareholding will initially include the Ministry of Finance Incorporated (MOFI) and BPE. However, the final ownership structure will undergo further consultation with the government and stakeholders.
NERC has set August 31, 2024, as the deadline for completing the transfer of assets and liabilities. TCN must surrender its system operator license within seven days of NISO’s incorporation.
Key Points:
- The Federal Government previously announced plans to unbundle TCN to enhance the power sector.
- The new Electricity Act paves the way for creating the ISO and transferring system operations functions from TCN.
- With this directive, NERC is enforcing the provisions of the Electricity Act, asserting its role as the sector’s apex regulator.
- TCN previously held two licenses and will now focus solely on transmission services.
