Adewale Sanyaolu

Hopes of an early resolution of the monstrous estimated billing system that gulps about N30 billion monthly from hapless Nigerians now hang on the balance as a recent intervention by the Federal Government to end the discriminatory and arbitrary billing has met brick wall.

At the centre of the current crisis is the Meter Asset Provider (MAP) Regulation 2018 facilitated by sector regulator – Nigerian Electricity Regulatory Commission (NERC).

The objective of the Regulations is to provide standard rules to encourage the development of independent and competitive metering services in the Nigerian Electricity Supply Industry (NESI). Under the Regulations, the NERC shall licence pre-qualified Meter Asset Providers (MAP) who will finance, install, maintain and where necessary, replace end-user electricity meters.

But, the latest intervention by NERC seem to have met stiff resistance from the Discos who obviously are not too supportive of the regulator’s meddlesomeness as majority of the 87 firms shortlisted for the MAP project have had to revert to it complaining of the unwillingness of the Discos to cooperate since the regulation became effective April 3, 2018.

In 2016, NERC said barely three million electricity customers, or 45 per cent of the 7.47 million nationwide have access to pre-paid meters.

The data showed a consumer metering gap of almost five million, which the government and the DISCOs have been struggling to meet without success.

Part of the industry efforts to bridge the metering gap was the introduction of a new meter intervention programme called, ‘Credited Advance Payment for Metering Implementation’ (CAPMI) by the electricity sector regulator in 2012.

However, to ensure that the MAP does not go the way of CAMPI which had now been jettisoned, NERC had issued a 120 days ultimatum to the Discos to engage the services of the new meter providers.

Under the CAPMI scheme, customers were expected to self-finance the meter, with the meter cost repaid over a period from their energy charges at 12 percent interest rate per annum.
Regrettably, the arrangement appeared not to have yielded much desired dividend as most electricity consumers who paid for the meters waited for several years without the delivery of their meters by the DISCOs.

But in an attempt to show its commitment to the MAP Regulation, the Federal Government says it has taken advantage of it to give a grant of N37 billion to a private sector operator to supply meters to interested Discos.

Minister of Power, Works and Housing, Mr.Babatunde Fashola, disclosed this at the 28th monthly meeting of power stakeholders in Kaduna last week.

But, the umbrella body of the electricity distribution companies, the Association of Nigerian Electricity Distributors (ANED), while raising concerns over the new third party metering draft initiated by NERC, said through its Chief Executive Officer, Mr. Azu Obiaya expressed dissatisfaction over the policy, “We are not happy with the regulation and there is quite a bit of it that we are not happy with. We are very concerned about the regulation. The Discos, as part of their performance obligations, have metering obligations.

“We want to be sure that whatever arrangement that comes out will allow us to ensure revenue protection and protect our customers. Meters cost money and that cost must be recovered somewhere. So, if the meter providers will be reimbursed for the cost of the meter, the question is: where does that money come from? Will it come from a tariff that is already significantly and artificially suppressed as we speak?

“Somebody must pay, and clearly it is illogical to think that with the Discos already bleeding – because they are not allowed to recover their full costs – that you can further push them towards bankruptcy by adding another cost that they cannot recover.

“We have recently provided feedback to the regulator and I believe that there is a consultation forum coming up soon. We will continue to strongly convey our concerns to the regulator,” Obiaya said.
For his part, a director at Eko Electricity Distribution Company (EKEDC), Mr. George Etomi, said that as much the intervention seems to be a welcome development, there are some issues that would arise with the MAP Regulation 2018 which NERC was silent on.

One of such issue, according to Etomi is ownership. He said the regulation failed to name who the owner of the meter would be after repayment. Would it be the asset provider or the Disco, adding that, with this new initiative, there would be a return of fixed charge which eventually is for the asset provider.

On the other hand, he said the integrity of the meter remained a major concern of the Discos, saying anything short of a smart meter would not be acceptable to the Discos.

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‘‘We have all manner of substandard meters in circulation at the moment. NEMSA which is the body responsible for certification and standards should ensure that the meters to be supplied to consumers are tamper proof so that the Discos won’t begin to record revenue leakages as a result of energy theft through bypass,’’ he warned.

For his part, the Executive Director, Research and Advocacy, ANED, Mr. Sunday Oduntan, said the Discos were not carried along in the process of formulating the new meter policy.
“When people say they have carried you along, informing you that they are doing something is not the same as carrying you along. Let’s wait and see; if it works for the nation, we will be happy.

“But for now, we are studying the situation and watching as the details come in and events unfold. Anything that will positively make metering better, we will always support it. But this particular one, I can tell you we have no comment for now; we are not condemning it and we are not commending it”, he said.

Also speaking against the new meter scheme, the Managing Director, Ibadan Electricity Distribution Company (IBEDC), Mr. John Donnachie, said, “I don’t believe in it because metering is a key part of our responsibility. We cannot put meters in because we don’t have a financial foundation to go and borrow money to put the meters in. We have to work with the government to solve the problem, not bring in another party to confuse the issue further.”

According to Abayomi-Olukunle, a partner at Balogun Harold, the success of the business arrangements which the MAP regulation envisages is dependent on the availability of power supply.
“If there is no power supply, this will affect the ability of Consumers, who opt for instalment payments for meter assets, to fulfill their payment obligations. This will have implications for MAPs depending on the nature of financing which a MAP secures. Without a doubt, MAPs have to structure for revenue risks of this nature when arranging financing.

“MAPs will also need to carefully negotiate the liability for utilities disputes relating to the supply of power, within the context of the commercial issues that such disputes, will throw up in an MSA”, he said.

However, the Managing Director, Momas Electricity Meters Manufacturing Company Limited, Mr. Kola Balogun, described the new regulation as a relief for electricity consumers as it would enable them to get meters as quickly as possible.

“It will allow some investors to inject a high-value capital into the metering scheme. That will eventually lead to the liberalisation of metering because there is an opportunity for consumers to pay and get meters immediately. Let’s pray the implementation will be as good as the policy because most of the time, we will have good regulation but the implementation will be defective.
“Let’s hope that the Discos will be willing to partner MAPs. That is the shortcoming that I have seen might happen because it (metering) is part of what they hold as their strengths to run the Discos. Let’s hope that it will be easier for them so that they can face the primary responsibility of providing electricity for the consumers,” he said.

In an email response to Daily Sun inquiry, Executive Secretary, Electricity Meter Manufacturers Association of Nigeria, Mr. Muideen Ibrahim, said Fashola should be in a best position tp provide the names of the investors engaged under MAP.

Ibrahim aligned with thoughts with that of Balogun, saying the move remained a welcome development as it will enable the metering gap to be bridged on time since it is an established fact that a lot of Nigerians are yearning for meters.

He noted that the coming on board of the private operators is not a threat to indigenous meter manufacturers, saying government can encourage private business owners as done in other climes
On its part, a Non Governmental Organisation (NGO) in the power sector, Independent Energy Watch Initiative (IWIN), said nonetheless, the provisions of the regulations raise a key concern: it restricts a MAP to a specific Disco and requires the MAP to acquire several permits if it wants to provide metering services to other Discos. This, the body said may be too cumbersome for a prospective MAP.

‘‘In our view, it is sufficient to require the MAPs to merely obtain a ‘No Objection’ from NERC before participating in other procurement processes, without requesting that they obtain a permit for each distribution network to which they intend to render services.

Given the fact that this framework seeks to encourage private investment in electricity metering and to ensure a swift meter roll-out, it will be more expedient to reduce the regulatory processes required to achieve these objectives,’’ it said.

Though IWIN, equally commended The MAP framework, saying it appears to be a viable means for the eradication of estimated billing and ensuring a more efficient way of reducing commercial and collection losses in the NESI.

However, it maintained that, this can only be achieved if there is an adherence to and enforcement of due process in the procurement process, and proper implementation of the metering service charge in a transparent manner.

‘‘It is expected that success of the MAP regime will relieve the Discos of the burden of providing metering services and enable them to give more focus on their core responsibility of power distribution.

Similarly, it was argued that, Nigerian-owned meter manufacturing companies and meter assembling plants can expect to a have greater participation in the metering industry as MAPs are required to obtain at least 30 percent of their meters from local sources. This may, in turn, lead to additional foreign direct investment into the country, while also ensuring transfer of technology to Nigeria.’’