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Tuesday , 21 August 2018

Electricity: New metering plan underway

The Nigerian Electricity Regulatory Commission (NERC) is working to grant a 15-year license to Meter Asset Providers (MAP) to speed up metering across the 11 Distribution Companies (DisCos).

A draft of the regulation indicates that the DisCos could be given 120 days (four months) after the approval to engage firms to provide meters to the huge “wait list” of customers.

The regulation is expected to be ready this February, industry sources said.

Statistics obtained from NERC reveal that as at July 31, 2017, only 3.451 million registered electricity customers were been metered from a population of 7.476 million.

The number represents 46 per cent of customers captured on the billing of the DisCos, and it means that, 4.025 million customers, about 54 per cent, do not have meters.

Data also shows that for customers that have meters, 410,796 of them bought them between 2013 and November 2016 under the Credited Advance Payment for Metering Initiative (CAPMI) rolled out by NERC to speed up the metering process after it received cries of “crazy” billing.

The term refers to what customers claim to be unfair and high billing under the “estimated billing” methodology introduced by NERC, which the DisCos follow to bill customers without meters.

If the distribution firms had met their metering targets of 4.92 million within three years as they had assured since its privatisation in 2013, there would have been an excess of 895,000 meters left to meter new entrants, our analysis has shown.

They, however, installed 201,756 meters during the period, the NERC report said. While these customers bought 51 per cent more meters than the DisCos when the CAPMI scheme operated, the DisCos had actually committed to installing 1.640 million meters annually which would cater to the metering needs of 4.92 million electricity customers.

The DisCos repeatedly blamed the paltry 12.3 per cent achievement of their initially planned annual target of 1.640 million meters on the changing macro economic indices such as the rise in foreign exchange; rise in inflation; inadequate tariff and stagnated power generation.

Spokesman of the DisCos’ umbrella group, Barrister Sunday Oduntan, said the Capital Expenditure (CAPEX) set by NERC in the DisCos’ tariff plan was not enough to meet the metering target and also finance other investments like transformer installations.

Determined to end the estimated billing by 2020, NERC, in a consultation paper in October 2017, said it was planning the new regulation which would introduce Meter Assets Providers (MAP) that would help bridge a four million metering gap.

Data from the commission shows that while there is 54 per cent metering deficit, the customer base presently at 7.4 million is expected to grow by nine per cent annually as captured in the Multi Year Tariff Order (MYTO), 2015 Model.

It is projected that there should be 300,000 to 500,000 meters yearly for the new entrants.

Another 1.7 million meters will still be needed for replacing defective ones, which is an estimated 50 per cent of the total installed meters, NERC also said.

The draft of the new ‘Meter Asset Providers Regulations 2017’, yet to be signed, describes what the latest metering initiative from NERC will be after CAPMI went down 13 months ago.

How new metering scheme may work

The regulation, which was expected to be ready by November 2017, missed the target. However, in the draft NERC released recently, it held the DisCos responsible for not  meeting their metering target, and that it would procure the services of Meter Asset Providers (MAP) to meet the target.

“The Distribution Licensee shall conclude the procurement process for the engagement of MAP within 120 calendar days of coming into effect of these regulations,” the commission said

After a DisCo gets an MAP, NERC will again engage a tender auditor to probe the procurement process.

To qualify as an MAP, firms would have to apply to NERC with a 10-year business plan along with other documents. “The tenure of MAP license shall be 15 years for successful firms in the first instance,” it said.

The proposed regulation also has a local content aspect as it mandates a successful MAP to source at least 40 per cent of the meters from local firms.

A MAP will also sign a Meter Service Agreement (MSA) with a DisCo to deploy meters within a period through a secured payment plan.

With the MSA, the MAP maintains the meter during the period and customers are expected to see officials of MAP doing routine checks on the installed meters rather than officials of the DisCos.

More so, the proposed rule still recognises the 71 Metering Service Providers (MSPs) licensed by NERC in its 2017 updated list. The MSPs will be engaged by the new players in the metering game, MAP rule indicates.

What customers should expect

NERC said in the rule that every customer must have a meter; that customers who reported faulty meters should have them repaired or replaced within two working days by MAP. The customer also must protect the meter equipment and must guard against tampering.

There is also the option of Customer Financing like the suspended CAPMI. Willing customers would indicate interest to the DisCo which will authorise the amount after inspecting the premises.

A customer is expected to pay the price of the meter to the DisCo while the MAP supplies and installs it within 21 working days. The DisCo in this case owns the meter and shall repay the customers “through energy credits over a period not exceeding five years” the draft regulation yet to be signed by the NERC leadership under the Vice Chairman, Garba Sanusi, stipulated.

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