Needed: A clear path for metering electricity customers

Seven years after national electricity assets were sold to private operators, more than half of electricity customers still do not have meters, thereby hemorrhaging cash in the sector and feeding customer discontent.

While the government stumbles from one policy to another, we urge the Nigerian Electricity Regulatory Commission (NERC) to provide a clear mandate for metering customers as this charade has become too painful to watch.

Providing meters to customers was supposed to be among the performance agreement power distribution companies (DisCos) were obligated to fulfill. Metering was a significant commitment towards reducing their commercial losses.

Shortly after taking control of the assets, the DisCos reneged, arguing that NERC’s inability to allow a biannual review of electricity pricing template called the Multi-Year Tariff Order (MYTO) as agreed led to a cash crunch impacting their ability to spend on capital assets including meters. The regulator acquiesced and started on a path of ruinous policies that did everything but provide customers more meters.

Under Sam Amadi, as NERC chairman, the commission began the Credit Advance Payment for Metering Implementation (CAPMI), which allowed electricity consumers to self-finance their meter acquisition and installation. This capitulation, an obvious aberration, was accepted by customers who were eager to free themselves from the pain of controversial estimated billing practices of DisCos. It soon became a norm.

Yet, even CAPMI failed. DisCos soon found a way to game the system by keeping customers on endless waiting lists, claiming meters were unavailable even as they continued to accept deposits for meters from customers. Some DisCos had contracts with foreign meter manufacturers to supply them meters but when the creaking economy under Buhari slipped into recession in 2016, fallen oil production and lower oil prices reduced dollars available in Nigeria hence these deals fell through. Many customers lost their money.

Babatunde Fashola, former minister of Power, Works and Housing, threw out the policy in 2016 and told customers to enter negotiations with their DisCos on meter provisions. On March 8, 2018, NERC created the Meter Asset Provider (MAP) regulations, which allowed DisCos to outsource meter provision. The policy was meant to create over N70bn worth of market for local meter manufacturers as they were supposed to supply 30 percent of the required meters according to NERC.

But even that policy soon after creation started careening off a cliff, starting off with DisCos unwillingness to key into it. NERC, in March 2018, issued a deadline of August 1, 2018, to the eleven Discos to engage the services of MAPs, this was ignored, and NERC rather than sanction them extended the deadline to the next year.

In 2019, the Federal Government announced a 35 percent duty on meters purportedly to encourage local meter production. This led to millions of meters being stranded at the ports until the policy was rescinded last year.

In October 2020, the Federal Government in a bid to stave off a strike action by labour groups over an increase in electricity tariff under a Service Reflective Tariff order said it was delivering 6 million free meters to customers across the country.

This was a decision taken without due regard to the MAPs and two months after it was announced, no meter is yet to be delivered while operators under the MAPs are clearly aggrieved by this development.

From the foregoing, it is easy to see that the problem with the power sector in Nigeria is largely due to policy inconsistency stemming from a regulator that is weak and dependent on the government. This failure is manifested in the inability to respect contracts, enforce policy provisions and this has resulted in the inability to create a thriving market for the power sector.

While Nigerians desire free meters, should this government neck-deep in debt, be offering to distribute 6million free meters estimated to cost over N260billion at this time? What happens to meters contracted under the MAPs arrangement? Two months after the government announced this plan, Nigerians are still not getting this meter, a clear indication that there was no forethought or strategy behind it.

This is why we urge NERC to start justifying its pay and take serious its responsibility of regulating the power sector. About 60 percent of electricity customers lack meters and many are being billed through what many consumers will term a fraudulent estimated billing system.

Some customers complain that many of the new meters installed since last year have been developing fault at an alarming rate. Seven years after privatisation, metering should not be the problem of a serious sector.