The Nigerian Electricity Regulatory Commission (NERC) has taken a significant step towards improving the country's electricity market by unbundling the Transmission Company of Nigeria (TCN) and establishing the Nigerian Independent System Operator of Nigeria Limited (NISO).
This move, announced in a circular dated April 30, 2024, aims to enhance market and system operations in the power sector.
TCN, previously responsible for both transmission service provider (TSP) and system operations (SO) functions, will now transfer these responsibilities to NISO.
The decision to create NISO was guided by the Electricity Act 2023, which came into effect on June 9, 2023, and provided clear guidelines for the incorporation and licensing of an independent system operator.
Under the new arrangement, NISO will manage all assets and liabilities related to market and system operations on behalf of market participants and consumer groups.
The company will also be responsible for negotiating and entering into contracts for the procurement of ancillary services with independent power producers and successor generation licensees.
NERC has directed the Bureau of Public Enterprises (BPE) to incorporate NISO as a private company limited by shares under the Companies and Allied Matters Act (CAMA), with the company's name subject to availability at the Corporate Affairs Commission.
The object clause of NISO's memorandum of association is in line with the provisions of the Electricity Act, ensuring that the new system operator will serve the best interests of market participants and system users.
This development marks a significant milestone in Nigeria's electricity market, as the unbundling of TCN and the establishment of NISO are expected to improve efficiency and transparency in the sector.
With NISO at the helm of market and system operations, stakeholders are optimistic that the new system operator will play a crucial role in enhancing the overall performance of the country's power sector.
