The Nigerian Independent System Operator (NISO) was supposed to be different. Established by the Electricity Act 2023 and formally inaugurated in March 2025, NISO represented the sector’s answer to a decades-old problem: the conflict between operating Nigeria’s transmission and managing Nigeria’s electricity market cannot be accomplished by the same entity without compromising both functions. The unbundling of these duties from the Transmission Company of Nigeria was heralded as transformative—a structural reform that would finally allow Nigeria to have a truly independent operator managing real-time grid operations and market functions with technical rigor, transparency, and autonomy. Except that NISO has not been allowed to be independent. And the primary reason lies not in the legislation that created it, but in the persistent presence of another federal entity occupying the market space where NISO must operate: the Nigerian Bulk Electricity Trading Company (NBET). The Architecture of Constraint  NBET is fully owned by the federal government. It was designed as a bulk trader and pool manager, yet over its decade-and-a-half existence, it evolved into something closer to a settlement organization—a financial intermediary that processes invoices between generation companies and distribution companies. The problem is structural: in a competitive electricity market, the system operator must be genuinely independent from trading functions. These roles have competing interests. The system operator’s job is to dispatch generation in real-time based on technical and economic merit to ensure grid stability. A trader’s job is to optimize financial outcomes within existing contracts. When the system operator and the bulk trader are the same entity, or when they operate in close proximity within government, the independence erodes. When the system operator and the bulk trader report to different political masters—or when one is a federal agency and the other claims quasi-regulatory status—the result is incoherence and political constraint. NISO sits at the intersection of these pressures. Its technical team has been tasked with making dispatch decisions that determine which generation reaches the grid. But those decisions cannot be made in a vacuum. They occur within a market structure where NBET still holds preferential relationships with government-owned generators like NDPHC, where PPAs (Power Purchase Agreements) with NBET carry implicit political weight, and where the fed’s fiscal exposure to the power sector flows through NBET’s balance sheet. The Real Costs of Constrained Independence The consequences are not theoretical. NDPHC, which owns the largest portfolio of generation assets in Nigeria—over 5,000MW installed capacity across 10 power plants—faces challenges in dispatch allocation due to the absence of PPAs with NBET and operational constraints tied to its government-owned status. This is telling. A national utility cannot dispatch its own generation efficiently because of contractual relationships with another federal entity. Meanwhile, as of March 25, 2026, only 2,908 megawatts was distributed to the country’s 11 electricity distribution companies, far below the already constrained 4,000-megawatt benchmark recorded earlier in the year. The technical reality is that NISO knows what needs to happen: the system operator must be able to make fair dispatch decisions based on economics and grid stability, not based on which generation company has relationships with which federal agency. But politically, NISO cannot be the entity that “breaks” NBET’s arrangements or undermines the federal government’s exposure to power sector contracts. That political cost is passed to NISO, and the cost is borne by the grid. Recent reforms have recognized this problem. Reforms in 2024/2025 began phasing out the Nigerian Bulk Electricity Trading Company (NBET) as the dominant intermediary, enabling generation companies (GenCos) to enter direct bilateral agreements with distribution companies (DisCos). This is progress. But phasing out is not the same as eliminating. NBET still exists. It still holds preferential claims on government-owned generation. It still sits between NISO and market outcomes. The Path to Real Independence For NISO to work as intended, several conditions must be met: First, NBET must transition completely out of its role as a preferential intermediary for government-owned generation. If government wishes to maintain NDPHC as a strategic asset, it should do so transparently through subsidy mechanisms that are visible in the fiscal budget, not through contractual arrangements that constrain the system operator. NISO must be able to dispatch NDPHC generation on merit, alongside every other generator, without political friction. Second, NISO must have genuine regulatory independence from the Ministry of Power and other political actors. The board appointed in 2025 appears qualified, but appointment is only the beginning. Independence requires a clear governance structure that insulates technical decisions from political pressure. NISO’s dispatch decisions should be defensible on technical grounds, not subject to political override. Third, all electricity trading must be conducted on the market, not through preferential federal arrangements. The move toward bilateral contracting and competitive trading is the right direction. NBET’s role should either transition entirely to private sector traders (who operate within market discipline) or be absorbed into NISO’s market operations as a regulated entity, not a federal political actor. Finally, NISO must have the authority and resources to enforce its decisions. A system operator that cannot enforce its directives is merely advisory. The operator must have clear authority over dispatch, over ancillary services, over balancing, and over the technical standards that govern the grid. Why This Matters Now Nigeria’s electricity crisis is not a technical mystery. The constraints are known: gas supply is insufficient, transmission capacity is limited (TFL), distribution losses are high (ATC). But within those physical constraints, the system operator must optimize what is available. NISO cannot do that while operating under political constraints imposed by the presence of NBET and the federal government’s fiscal exposure to power sector contracts. The Electricity Act 2023 provided the legislation for independence. The board appointments in 2025 provided the governance structure. What remains is the political will to let NISO actually be independent. This is not about attacking NBET’s leadership or competence. It is about recognizing that two federal entities cannot occupy the same market space without conflict. If Nigeria is serious about power sector reform, it must complete the unbundling. Let NISO be the independent system operator that the law intended. Let NBET either transition to private sector competition or be regulated as a participant, not a privileged federal actor. The grid—and Nigeria’s industrial consumers—cannot wait any longer. -Adetayo Adegbemle is a public opinion commentator/analyst, researcher, and the convener of PowerUpNigeria, an Electric Power Consumer Right Advocacy Group, based in Lagos. (Twitter: @gbemle, @PowerUpNg)