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Launch of the Nigerian Independent System Operator and Unbundling of TCN by NERC

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Newly formed Nigerian Independent System Operator of Nigeria Limited (NISO) has been introduced by the Nigerian Electricity Regulatory Commission (NERC) as part of the unbundling process of the Transmission Company of Nigeria (TCN).

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The newly formed firm is required to take over all market and system operating activities from TCN, as stated in an order signed by Sanusi Garba, NERC Chairman, and Musiliu Oseni, Vice Chairman, dated April 30, 2023.

The Electric Power Sector Reform Act granted TCN the authority to operate as a transmission service provider (TSP) and a system operator (SO).

Nevertheless, more precise instructions for establishing and licencing the ISO, as well as for transferring assets and responsibilities from TCN’s share in the ISO, were made available by the Electricity Act 2023.

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To comply with this order, NERC has directed the BPE to form a private limited liability company (LLC) under the Companies and Allied Matters Act (CAMA), 2020, no later than May 31, as per the instructions given by NERC.

The Electricity Act and the conditions of TCN’s system operating license provide that a new entity, NISO (“NISO”), will take over the market and system operation duties.

NERC stressed that the MOU between NISO and the firm will grant the company the authority to handle all assets and liabilities pertaining to the operation of the market and systems on behalf of stakeholders, consumer groups, or market participants.

According to its license, NISO is also responsible for carrying out the other market and system operation responsibilities listed, including negotiating procurement contracts for ancillary services with independent power producers and successor generation licensees.

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All things considered, NERC is counting on NISO to carry out the duties and rights associated with the market and system operations that were once held by TCN.

This is a huge deal for Nigeria’s power industry, which is undergoing a major reorganization to improve efficiency and market performance.

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