• Tuesday, June 25, 2024
businessday logo

BusinessDay

State, private investors prioritise metering to build power market

State, private investors prioritise metering to build power market

State governments eager to develop their own electricity markets as well as private investors who wish to play in the electricity market are partnering with meter providers, learning from the Federal Government’s poor handling of a critical factor to build a viable electricity market – metering.

A review of the plans by the Lagos and Edo state governments, for example, ranks metering high on the priority lists as these state governments wishing to set up their electricity market have reached an understanding with various meter assemblies as part of their plans. The Lagos State government even recently organised a competition to select the best metering ideas.

Private investors providing electricity in large estates that have chosen to set up hybrid systems with existing distribution companies and even off-grid energy market investors make metering, the most viable way to recoup your investments, a priority in their plans.

Off-grid communities in rural northern states have functional meters, even as poor metering capacity continues to expose the incompetence of the current utility managers at the distribution company (DisCo) and regulator levels.

In 2021, the Lagos State Ministry of Energy and Mineral Resources signed a Memorandum of Agreement with Ikeja Electric and Sahara Power Group to supply uninterrupted power to residents of the state.

The agreement also includes the distribution of free prepaid meters to low-income areas, with the pilot phase of 20,000 meters to be distributed in Alimosho Local Government Area of the state.

At the signing of the agreement, Olalere Odusote, commissioner for energy and mineral resources, said 20,000 meters had been procured by the state government and would be distributed free to low-income areas in Alimosho Local Government Area as the pilot phase.

Godwin Obaseki, governor of Edo State, sent an Electric Power Sector Reform Bill to the state House of Assembly in March 2022 and it was passed in September 2022.

The law creates two statutory bodies – a regulatory commission to create a framework for a state electricity market with clear provisions on the role of metering in funding the plan and an electrification agency – to implement the State Electrification Fund in unserved and underserved areas.

In recent visits by BusinessDay to remote communities without grid connections in Abuja and Kaduna states, whose only access to electricity is through solar power, all the households connected to the local utility were metered.

Most of them were equipped with smart meters to enable remote monitoring as the utilities are often located far away from where the mini grid serves the community.

However, getting all grid-connected customers a functional meter has been a herculean task since 2013.

Shortly after privatisation, the Nigerian Electricity Regulatory Commission (NERC) started the Credited Advanced Payment for Metering Implementation scheme where customers paid for their own meters after DisCos reneged on their obligations to meter their customers.

This was replaced by the Meter Asset Providers, a programme wherein third-party meter providers issue electricity customers meters for a fee.

The programme ran into troubles when the Federal Government announced it was giving 6 million free meters in 2021 under the National Mass Metering Plan.

Read also:Events that shaped Nigeria’s electricity sector in 2022

Analysts raised concern about the government’s ability to finance the plan. “I don’t know how the government that is currently borrowing to finance basic obligations will pay for it,” said Ayodele Oni, an energy lawyer and partner at Bloomfield Law Practice.

The next phase of the plan was to develop 4 million meters but it has been dogged with challenges.

“As you all know, these meters have components that are largely imported and it takes time to ship, to clear through customs and for the NMMP meters to be available,” said Sanusi Garba, NERC chairman.

Metering still remains the biggest concern for electricity customers, accounting for over a quarter of all complaints in the first quarter of 2022, according to NERC’s data.