In a move set to reshape Nigeria's electricity landscape, the Nigerian Electricity Regulatory Commission (NERC) has issued a directive to establish the Nigerian Independent System Operator of Nigeria Limited (NISO) within the next 30 days, leading to the division of the Transmission Company of Nigeria (TCN).

The order, identified as NERC/2024/45 and dated April 30, was signed by the Chairman/CEO of NERC, Sanusi Garba, and Vice Chairman, Musiliu Oseni. It mandates TCN to finalize the identification and mapping of assets and liabilities for the system/market operation segment of its business within 30 days and submit them to the Commission and the Bureau of Public Enterprises (BPE) no later than June 30, 2024.

Following this, the BPE, through the National Council on Privatisation, will oversee the transfer of all market and system operation assets and liabilities from TCN to NISO.

NISO, the new system operator, will assume direct responsibility for the network, particularly the troubled national grid and other relevant market contracts managed from Osogbo.

This action effectively revokes one of TCN's two operating licenses, permitting it to operate as both a Transmission Service Provider and an Independent System Operator, as previously granted by the commission in line with the Electric Power Sector Reform Act.

However, the implementation of the Electricity Act 2023, effective June 9, delineated clearer procedures for incorporating and licensing the independent system operator (ISO) and transferring TCN's ISO assets and liabilities.

In accordance with the Electricity Act (EA) 2023, NERC instructed BPE to establish, by May 31, 2024, a private company limited by shares under the Companies and Allied Matters Act to fulfill the market and system operation functions outlined in the EA and TCN's system operation license.

This new entity, to be named the Nigerian Independent System Operator of Nigeria Limited ("NISO"), will manage all assets and liabilities related to market and system operation on behalf of market participants and consumer groups, as specified by the Commission.

NISO will assume the rights and obligations related to market and system operations currently held by TCN, including the negotiation and procurement of ancillary services with independent power producers and successor generation licensees, among other responsibilities.

Its operations will align with the Electricity Act and the terms of its license, prioritizing the interests of market participants and system users.