- … new company to ensure increased system and and market operational integrity
- …. will refocus TCN on transmission stability and capacity development
The Nigerian Electricity Regulatory Commission has issued an order for the incorporation under the corporate affairs commission of a new and separate entity to be called the “Nigerian Independent System Operator (NISO)”, to carry out market and system operations functions for the national grid; functions hitherto carried out by the Transmission Company of Nigeria (TCN).
This was contained in a recent statement signed by the Chairman and Vice Chairman of NERC, Sanusi Garba and Musiliu Oseni, respectively.
According to NERC, it was envisaged that under the repealed Electric Power Sector Reform Act of 2005, the TCN would transfer the function of system operations to an independent system operator. This was later clarified by ‘The Electricity Act’ of 2023 which gave precise guidelines for the incorporation and governance structure of the ISO; as well as the transfer of assets and liabilities of the systems operations portion of TCN to the ISO.
This announcement has effectively unbundled the TCN, cleaving the market and systems operations out of its control, leaving it only with transmission service functions.
The main responsibility of the System Operator is to operate the transmission system and the connected installed generation in a safe and reliable manner. SO is also responsible for the overall security and reliability of the grid system, economic dispatch of available generation resources and maintaining system stability.
The Market operations is responsible for the administration of the Electricity Market, promoting efficiency and where possible competition. This includes functions such as: Provision of a framework for an efficient, competitive, transparent and reliable wholesale electricity market, and set out of the responsibilities of participants, the TSP, the System Operator and the Market Operator in relation to trading, co-ordination, dispatch and contract nomination, pricing of imbalances and ancillary services, metering, settlements and payments.
Previously, under the TCN, two entities called the Nigeria Electricity System Operator (NESO) and the Operator of the Nigerian Electricity Market (ONEM) had been overseeing such system and market functions under the TCN, but with this order, both entities would be collaped into the new company, the NISO.
The NERC has also mandated that for the BPE, through the National Council on Privatisation, to wrap up the establishment of the new company by the 31st of May, 2024 with initial shareholders as the Bureau of Public Enterprises (BPE) and the Ministry of Finance Incorporated (MOFI), with final shareholding structure determined after government and industry consultations.
The statement further indicated that all staff operating under these two functions shall retain their employment status, benefits and emoluments. It also clarified that all valid contracts pertaining to the two functions under the TCN shall remain in force. NERC envisages that all personnel transfers, establishment modalities and operational commencement shall be concluded by August 2024.
