NERC Set to Unbundle Transmission Company of Nigeria

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The Nigerian authorities appear set to unbundle the Transmission Company of Nigeria (TCN), a plan inside sources said had been in the offing in the last four years.

The plan, Orient Energy Review gathered, of which the Nigerian Electricity Regulatory Commission (NERC), is said to have initiated processes, will see TCN split into two firms, a Transmission Service Provider (TSP) and an Independent Service Provider (ISP).

NERC has called on stakeholders in the sector for proposals of on the procedure for splitting the power transmission utility firm.  TCN is responsible for operating the national power grid, network maintenance, load allocation as well as reconciliation of energy payments for participants in the Nigerian Electricity Market (NEM).

Five years ago, a former Minister of Power Prof. Chinedu Nebo, issued a circular splitting the TCN into an ISO and TSP, with substantive chief executives. However, NERC under the former Chairman, Dr Sam Amadi, cancelled the move on the technical grounds that NERC, which had issued licences to TCN, was not part of the unbundling decisions, and needed to endorse such action.

A stalemate also ensued between the Ministry and the then TCN board led by Ibrahim Dahiru Waziri, who also stated that the TCN board was not consulted. In the latest process to split TCN, NERC said upon the power sector privatisation, the Electric Power Sector Reform Act (EPSRA) 2005, TCN should be split to ensure independence.

NERC said it had consulted stakeholders in May 2015 towards splitting the firm but that, “the initiative was not concluded on account of the eventual expiration of the tenure of the last Commission.”

The Commission said the first option is that the System Operator (SO) may continue to be a part of the corporate entity of the TCN but operating within the rules of the market and in such a manner as to ensure its operational and financial autonomy. The second option is to have a federal government-owned ISO agency with public staff, management and board of directors.

It may also create a stakeholder-owned ISO agency, which means operators of the electricity market, consumer groups and NGOs. The regulator said ISO which is part of TCN now is being funded by the electricity market through a certain percentage from the tariff.

Some staff of the TCN who were contacted last night said it was a welcome decision. “For sure it will create employment cohesion,” a source in TCN said. The unbundling of the ISO is considered appropriate and the new ISO agency is created. NERC said it will be funded by the annual budgets as approved in line with the provisions in the market rules.

Chibisi Ohakah, Abuja

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