A new metering strategy about to be implemented by the Nigeria Electricity Regulatory Commission, NERC, would enable Nigeria bridge huge metering gap by over 30 percent yearly, amounting to well over a million consumers, experts have said.
Metering gap for all electricity Distribution Companies is said to stand at about 4,740,275 as at December 31, 2017.
NERC said on Tuesday that the Meter Asset Provider Regulations is aimed at eliminating estimated billing and its attendant challenges in the Nigerian Electricity Supply Industry.
The Regulations would become effective on April 3, 2018, and introduces meter asset providers as a new set of service providers in Nigeria Electricity Supply Industry.
As assets with a technically useful life of 10-15 years, the new rules provide for the third-party financing of meters, under a Permit issued by the Commission, and amortisation over a period of 10 years.
“The Regulation is expected to fast track a closure of the metering gap in the Nigerian Electricity Supply Industry within three (3) years of coming into effect, and encourages the development of independent and competitive meter services in the electricity industry,” the regulator said in a mailed statement.
The regulations will also facilitate revenue enhancement for the power sector and the ensure energy accountability, which is a key component of sustaining Nigeria’s power value chain, and sustaining Nigeria’s power reforms.
As confirmed by the regulator, electricity Consumers will now pay for the meters following stakeholders’ endorsement of this new option as a better strategy to close the increasing metering gap and avoid huge losses by the energy providers.
“Customers provided with meters under the MAP regulation will pay a metering service charge and a distinct tariff lower than other customers with legacy meters. Discos will be held responsible for closing the metering gap by engaging MAP through an open transparent competitive process,” NERC stated.
However, the actual amount to be charged for the meter service is yet to be determined but will be fixed after competitive procurement bidding process to be supervised by the regulator, Frank Okafor, a Commissioner at NERC told BusinessDay.
“It is a welcomed development and offers a wider opportunity to close the metering gap in the country. There is at least a payment assurance,” Okafor stated.
The MAP regulations, NERC stated is in a renewed bid to ensure that electricity customers only pay for what they actually consume, as it provides for the supply, installation and maintenance of end-user meters by other parties approved by the Commission.
Speaking to BusinessDay, Chuks Nwani, an Energy Lawyer described the initiative as a bold statement from the government, calling it a “comprehensive way of facilitating efficiency in the power sector”.
“I sincerely believe that these regulations will increase metering availability and close the gap by 30% since the regulator and the operators are largely on the same page in this development,” he said.
Ubani explained that the customer will gradually pay for the meter alongside energy charge, but advised that the meter roll out has to be very comprehensive to achieve desired results. He also noted that the third party meter providers must ensure integrity of the meters, forestall bypass, while also ensuring everyone is metered.
He also suggested that the Central Bank of Nigeria, CBN and the Bank of Industry, BoI could provide some comfort to the Third Party Metering option providers with a single digit interest rate at 8-9 percent to help them upscale meter access to energy consumers.
In its latest fact sheet, NERC assured that Meter Asset Providers would be competitively engaged by electricity distribution companies through a transparent and competitive process. The meters would be installed at customer premises at the competitive cost approved by the Commission.
Meanwhile, the eleven Discos are expected to, within 120 days of commencement complete the process of engaging Meter Asset Providers based on their respective meter deployment plan and targets set by the Commission.
According to NERC, “The current meters being installed by electricity distribution companies are not free as the current tariff being paid by all electricity customers includes a return on the investment on meter assets.
“The new regulation provides that customers only pay for metering service charge after the installation of a meter at their premises. Electricity Distribution companies shall create new tariff classes to bring this to effect.
The regulator also assured that under the new regulatory framework, defective meters would be repaired or replaced free of charge within two working days of being notified, unless the damage was caused by the customer.
Oyebode Fadipe, the Deputy spokesperson for the Abuja Electricity Distribution Company, AEDC, told BusinessDay that metering is a necessary component in the power sector reforms, and that it would enhance energy efficiency and confidence between consumers.
Relying on their recent studies, he said losses are low where meters are available.
“In AEDC, we are committed to metering customers for all the good reasons associated with the initiative,” he noted, reacting to the released MAP regulations.
This is a positive initiative by the government in ensuring that this step speaks to challenges commonly associated with the Nigerian Electricity Supply Industry.”
According to him, “All stakeholders are at consensus on the issue of meter. We are supportive of this initiative for it would enhance energy accountability and revenue enhancement.
In the new regulations, NERC expects that where there is delay in repair or replacement of faulty meter within the billing period, an average of the last three months billing/vending would be applied for the purpose of determining customer’s energy consumption.
In a situation where a customer relocates within the franchise area, the customer would apply for transfer of services including applicable credits for energy. Payment of Metering Service Charge by the customer to the MAPs would be stopped upon full amortization of the meter asset over its technical life.
“Where a customer elects to pay in full upfront for a meter under the regulation, he/she shall be exempt from the payment of Metering Service Charge. Installation of meter at customer premises shall be within ten working days of the receipt of payment.
The regulator, however, stressed that the MAP regulations shall not over-ride metering contracts entered into by distribution licensee. Existing metering contracts shall transit to the provisions of the Meter Asset Provider regulation after December 31, 2018.
ONYINYE NWACHUKWU & HARRISON EDEH, ABUJA
