Agatha Chitumu, Abuja
DAILY COURIER - The National Electricity Regulatory Commission (NERC) is on the verge of establishing an Independent System Operator for the Nigerian Electricity Supply Industry.
The regulatory instrument is cited in ORDER NO: NERC/20U/45
of the Commission.
This was contained in a release signed by Sanusi Garba Musiliu Oseni
and dated 30th April 2024. Copies were made available to newsmen.
The Order according to the release shall take effect from 1 May 2024 and shall remain in force until amended or revoked by a subsequent Order issued by the Nigerian Electricity Regulatory Commission ("NERC" or the "Commission").
In the new order, the Transmission Company of Nigeria Plc ("TCN'/) as a successor company was issued 2 (two) separate licences to operate as the transmission service provider and system operator for the national grid system by the Commission.
Also, the repealed Electric Power Sector Reform Act 2005 ("EPSRA" or the "Repealed Act") envisaged that TCN would transfer the function of system operation For the national grid to an Independent System Operator ("ISO").
It reads further: "The Electricity Act (the "EÃ…" or "Act") 2023 came into effect on 9 June 2023 and this piece of legislation went beyond the Repealed Act by providing clearer guidelines for the incorporation, governance structure and licensing of the ISO, as well as the transfer of the assets and liabilities of the system operations portion of TCN to the ISO.
"Section 15 of the EA provides as follows on the incorporation and licensing of the ISO.
"The Transmission Company of Nigeria Plc (hereinafter referred to as
"TCN"), being the successor company issued the license that covers
Transmission Service Provider, market and system operation functions under the repealed Act shall in accordance with the terms of ifs license and within such stage or period of the market as the Commission may in a written directive specify, take such steps as are necessary under the Companies and Allied Matters Act, 2020 to incorporate an entity, the Independent System Operator which may be a company limited by shares or have such ownership and governance structure as the Commission may specify and the entity once incorporated pursuant to the provisions of this section shall immediately apply to the Commission and be licensed by the Commission as an Independent System Operator to carry out such market and system operation functions as stipulated under this Act ifs license and such terms and conditions as the Commission may direct. "
"Upon incorporation and issuance of an ISO license by the Commission, pursuant to subsection (l ) of *his section, the TCN shall transfer to the Independent System Operator (hereinafter called "the "ISO" in this Act), all the assets and liabilities held by the Transmission Company of Nigeria Plc pertaining to its market and system operation functions and the Independent System Operator shall be subject to such powers and duties of an independent System Operator under the terms of its license and the provisions of this Act in relation to market and system operation;
ii. the TCN shall retain its Transmission Service Provider license and shall be responsible for transmission assets and liabilities and perform such functions as are relevant to the development and maintenance of the power transmission infrastructure in accordance with the terms of its license as may be issued by the Commission and the provisions of this Act.
"The Commission shall, through an order put in place a clear plan and timeline for the transition process in subsections (7) and (2) of this section above to avoid disruption of industry operations.
7. Section 76(7) of the EA provides —
At the time of incorporation, the subscribers fo the Incorporation Documents of the ISO shall be as may be directed by the Commission in consultation with relevant stakeholders.
"In order to achieve the objective of the creation of the ISO, the Commission held several stakeholder consultations and public hearings on the determination of the following .
"A BPE shall incorporate, no later than 31 May 2024, a private company limited by shares under the Companies and Allied Matters Act to carry out the market and system operation functions stipulated in the EA and the terms and conditions of the system operation licence issued to TCN.
"The name of the company shall, subject to availability at Corporate Affairs Commission, be the Nigerian Independent System Operator of Nigeria Limited ("NISO").
ii. The object clause of the Memorandum of Association of the NISO as provided in section 1 6(2) of EA shall be as follows:
a. to hold and manage all assets and liabilities pertaining to market and system operation on behalf of market participants and consumer groups or such stakeholders as the Commission may specify.
Meanwhile, the TCN has said such transfer shall be concluded not later than 31 August 2024 as completion date when TCN shall relinquish its system operation licence to the Commission.
