The Association of Nigerian Electricity Distributors (ANED), the umbrella body of the electricity distribution companies (DisCos) has raised concerns over the new third party metering draft recently initiated by the Nigeria Electricity Regulatory Commission (NERC). NERC, in an attempt at addressing the issue of estimated billing had said it is making plans in employing the services of Meter Asset Providers (MAPs) for the effective metering of customers.
The Meter asset providers to be introduced into the power sector, will be expected to supply and install meters within 21 working days of payment at the premises of electricity customers who choose the option of paying for the meters. The distribution licensee (the electricity distribution company) will own such meters and repay the customers through energy credits over a period not exceeding five years, according to the Draft Meter Asset Providers Regulation 2017 released by NERC.
The Chief Executive Officer, ANED, Mr. Azu Obiaya, said;
“We have seen the draft regulation and there is quite a bit of it that we are not happy with. 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.”
Describing metering as a critical point in the Discos’ revenue collection, he said, “So, you can understand that 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 under 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.”
According to the proposed regulation, the distribution licensee (Disco) is responsible for meeting its metering targets as stipulated by the commission from time to time, and shall procure the services of MAP in accordance with the regulations to enable it to meet the targets. It said the Disco would plan and execute a transparent and competitive procurement process to engage a qualified MAP, and enter into a Meter Service Agreement with selected MAPs for the deployment of a specified number of meters within the tenure of the agreement.
The draft stated;
“Upon completion of evaluation of bids, the successful bidder shall submit an application for the grant of a Meter Asset Provider licence to the commission. The commission shall grant a licence to the successful bidder subject to satisfactory compliance with the minimum qualification criteria and procurement processes provided in these regulations. The distribution licensee shall make periodic payments to cover the cost of meters installed by MAP as agreed by both parties. In the event of default, MAP shall call upon the payment security provided,”
The draft regulation said the distribution licensee should, within 30 days of the grant of permit by NERC to the successful bidder, issue the payment security.
Speaking on the issue, the Managing Director, Ibadan Electricity Distribution Company, Mr. John Donnachie, said;
“I don’t understand it (the draft regulation). 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 the proposed regulation, where the customer chooses the option of self-financing of the meter, the distribution licensee shall provide the customer with authorisation specifying the amount to be paid for installation of a meter after inspection of the customer’s premises.
The commission said every customer should have a meter installed to ensure proper energy accounting, adding, “If a metering system fault occurs, MAP shall provide urgent metering services to repair or replace the meter and its accessories within two working days as stipulated in the metering code.”