Millions of unmetered Nigerians are at risk of having no access to power supply as the Nigerian Electricity Regulatory Commission (NERC) says it is preparing grounds for the enforcement of “no meter, no power supply” policy. The policy is expected to come into effect once the regulator comes up with the policy of capping estimated billing cost for power consumers.
Sharffudeen Mahmoud, general manager, market competition and rates, NERC, confirmed this exclusively to BusinessDay, saying the regulator would embark on the policy once the regulatory framework for capping meter billing for estimated billing comes on stream.
“Currently, we don’t have a regulatory policy on estimated billing, but wider consultation is currently ongoing with submissions being made by the DisCos through their Performance Improvement Plan,” Mahmoud said.
He noted that once NERC finalises terms and comes up with the estimated billing capping policy, supply would be cut off from any Nigerian who is connected to the grid and is not metered.
Electricity consumers have been raising concerns over non-metering, and the DisCos themselves have often said the situation has compounded the liquidity concerns in the power sector value chain.
There have also been concerns of overbilling through estimated billing by electricity consumers, with the concerns currently being looked into it with a policy to address the issue currently underway.
It is to resolve the issues around metering that NERC came up with a third-party Meter Asset Provider (MAP), which is expected to continuously close the metering gap of about 4.6 million unmetered Nigerians.
“We are still consulting on the regulation for capping estimated meter billing,” Mahmoud said.
He said NERC would embark on an extraordinary tariff review, which would see the exchange rate variables, inflationary rates and even electricity consumers who would want to move their tariff class addressed and reflected in the upcoming tariff review, expected to gradually make the sector more investor-friendly.
“The commission would be embarking on an extraordinary review that would see exchange rate variables and inflationary rates addressed. Recall, all the companies that signed the power purchase agreement signed in American dollar. Hence there must be appropriate electricity tariff to drive the sector,’ he said.
Mahmoud said NERC would effect the tariff review for 2019 next year, noting that there has not been tariff increase except for the review of the previous years of 2016 to 2018 Multi-Year Tariff Order.
“The sector has been privatised for over five years now. We must keep putting our house in order till will get it right. The last time we did the review, the American dollar was about N190 per dollar; from that time till now, it is N360, which is about 60 percent rise in the cost. All these must be factored in to open up the sector for investments,” he said.
On concerns of continuous intervention in the sector by the government which has not produced the needed result, he said the government will keep intervening in the sector until there is a cost-reflective tariff to grow and advance the sector alongside other parameters that would ensure the sector runs according to the forces of demand and supply.
Some industry analysts said appropriate pricing of electricity and efficiency on the part of the distribution companies are what the regulator should focus on to make the sector more investor-friendly.
“People are willing to pay for the right cost of power if they can get value for their money. Recall, we still have about 100 million Nigerians in the off-grid electricity sector, some of them are paying as high as N80 per kilowatt hour of power which is higher than the on-grid payment because they needed power,” Segun Adaju, president, Renewable Energy Association of Nigeria, told BusinessDay.
“The regulator should not give us reasons that people don’t want to pay for the right cost of power, because they are delaying the sector from growing with the way they are handling the privatisation issues,” Adaju said.
Rumundaka Wonodi, pioneer managing director/chief executive, Nigerian Bulk Electricity Trading plc (NBET) and founder, ZKJ Energy Partners Ltd, told BusinessDay that the regulator must priortise the issue of efficiency in the Performance Improvement Plan expected of the DisCo, while raising concerns that meter availability does not solve the problem of efficiency in the sector.
“It is necessary to have a cost-reflective tariff to keep the market afloat. Meter availability does not solve the problem of efficiency in the sector. The DisCos should also work on their service provision for the sector,” Wonodi said.
“We supply power to Benin and some other neighbouring African countries and they have power constantly at 24 hours a day, why can’t we have power here? It is question of efficiency and we must address that to allow the sector grow post-privatisation,” he said.
HARRISON EDEH, Abuja
