Electricity consumers may soon heave a sigh of relief as the Nigerian Electricity Regulatory Commission (NERC), has rolled out fresh regulations under its Meter Asset Provider Regulation (MAPR), which may likely bring an end to the monopoly once enjoyed by the electricity Distribution Companies (Discos) in providing meters.
The new regulation will also halt the several years of untold hardship customers face with estimated billing.
MAP, according to NERC, is aimed at eliminating estimated billing and its attendant challenges in the Nigerian Electricity Supply Industry (NESI), while also targeting to close the metering gap over the next three years.
Minister of Power, Works and Housing, Mr. Babatunde Fashola, had last year, shocked most Nigerians when he said the 11 Discos would need about N220 billion to provide prepaid meter to power consumers.
Regrettably, Nigerians have had to bear the brunt of the inefficiencies of the Discos by paying about N3 billion monthly in estimated billing as a result of the absence of a robust metering plan.
The inability of the Discos to meter every household has been further compounded by liquidity challenges and difficulties in accessing credit lifeline from banks to purchase meters.
But in the face of these daunting challenges, there seems to be a ray of hope for the 11 Discos under the MAPR, which will save them the hassles of seeking for funds to carry out metering programme for over six million unmetered consumers.
What is MAP
The MAPR was introduced in a renewed bid towards ensuring that electricity customers only pay for what they actually consume. The regulation provides for the supply, installation and maintenance of end-user meters by other parties approved by the Commission.
According to a statement issued by Dr. Usman Abba Arabi, the Head, Public Affairs Department at NERC, the regulation is expected to fast-track the closure of the metering gap and encourage the development of independent and competitive meter services in the sector.
It stated: “The Meter Asset Provider (MAP) Regulation (Regulation No. NERC/R/112), which would become effective on April 3, 2018, introduces meter asset providers as a new set of service providers in NESI.
As assets with a technically useful life of 10-15 years, the regulation provides for the third-party financing of meters, under a permit issued by the Commission and amortisation of over a 10 year-period.
NERC said the 11 Discos in the power market had a collective customer base of 8,292,840, but have only been able to provide meters for 3,591,168, while 4,701,672 have not been metered as at August 2018.
In its explanation of the development, NERC stated that the percentage of unmetered customers in the market was 57, stating that the practice of estimated billing by the Discos has continued to fuel payment apathy amongst consumers.
MAP benefits to Discos/consumers
According to Arabi, the Discos, in line with their licensing terms and conditions, are obliged to achieve their metering targets as set by the Commission under the new regulation.
He explained that the contracting of Meter Asset Providers (MAP) shall be through an open, transparent and competitive bid process thus ensuring that meters are provided at a least cost to electricity customers.
“It is to be noted that there are no free meters even under the current tariff regime as all customers, including those on estimated billing, currently pay for a return on the investment made by Discos on meters in their networks.
“Under the new MAP regulation, customer classes shall be amended to ensure that customers only pay for meters when a meter is physically installed in their premises. The electricity bill of customers provided with a meter under the new regulatory framework shall comprise two parts – energy charge and metering service charge.
The payment of metering service charge will be removed from the customer’s electricity bill upon the full amortisation of the meter asset over its useful life.
All faulty meters are expected to be repaired or replaced free of charge within two working days, except in instances where it is established that the customer is responsible for the damaged meter.
In pursuit of promoting local content, the new MAP regulation mandates the investors to acquire a minimum of 30 per cent of their metering volume from indigenous meter manufacturers.
This local content threshold may be adjusted by the commission from time to time in line with the verified manufacturing volume of local manufacturers.
“The 11 Discos are expected to, within 120 days from the effective date of the regulation, engage the services of MAPs towards the achievement of their three-year metering targets prescribed by the commission.
The performance of Meter Service Providers shall be governed by the provisions of the Meter Asset Provider Regulation, technical codes of the electricity industry, and a Meter Services Agreement/Service Level Agreement signed with the Discos.”
Meter manufacturer seek funding support
Chairman, Momas Electricity Meters Manufacturing Limited (MEMMCOL), Mr. Kola Balogun, appealed to the Central Bank of Nigeria (CBN), to make single digit credit line available to meter manufacturers for the effective actualisation of Meter Assets Providers (MAP) programme.
Balogun, disclosed that funding constraint remained a major towards the successful implementation and execution of MAP as the project capital outlay is very huge.
To this end, Balogun proposed that the CBN provides credit facilities to the tune of N10 to N20 billion for each manufacturer.
He urged the CBN to provide a soft landing for meter manufacturers by granting them single digit credit line, which will allow them to pay back in due time.
Balogun noted that while most meter manufacturers, including MEMMCOL, are already positioned for the execution of the MAP programme in partnership with the DISCOs, they would require a high level of support from the Federal Government of Nigerian, and the CBN, to be able to deliver on the extent of volume of meters to be deploying.