• Friday, March 29, 2024
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BusinessDay

Estimated billing not going away as metering plan heads for crash

electricity-meters

The plan to meter over 5 million electricity customers in Nigeria who are currently charged dubious estimated bills by the power distribution companies (DisCos) is careening towards disaster on the back of a 35 percent hike in import levy on electricity meters and poor financial ability of meter asset providers to finance purchase of new meters, BusinessDay findings show.

Following the introduction of the Meter Asset Provider (MAP) regulations in May, a plan to have third-party investors finance meter purchase and recoup proceeds from customers’ retail payment for power, the Ministry of Finance reviewed upwards the import levy on electricity meters from 10 percent to 45 percent and the Nigerian Customs Service began immediate implementation.

The consequence is that the Meter Asset Providers are unable to clear the meters at the ports. This has started to derail the programme as the Nigerian Electricity Regulatory Commission (NERC), the industry regulator, had directed that all DisCos complete the MAP procurement process by March 31, 2019.

“The Nigerian Customs does not set import duties, our job is merely to implement government policy and tariffs are implemented following guidelines including duties in other countries,” Joseph Attah, Customs spokesperson, said by phone.

Analysts say this points to a mismatch of priorities by various agencies of government. “It doesn’t show we are serious about encouraging meter rollout if we are increasing import duty at the same time,” said Chuks Nwani, an energy lawyer and vice president of PowerHouse International, a Lagos-based consultancy.

The Nigerian Customs Service began implementing a revised 10 percent import duty on solar panels soon after the Ministry of Industry, Trade and Investment granted pioneer status to solar energy entrepreneurs and volumes shot up, arguing that solar panels should be taxed the same as generators because they both generate power.

BusinessDay also gathered that the Meter Asset Providers are cash-strapped and unable to fulfil orders for meters. The new import levy provides a convenient excuse to absolve the investors of responsibility.

“The way it is going, the MAPs programme may fail if urgent steps are not taken to check the situation,” said a top executive in one of the DisCos.

Operators decry the seeming reticent nature of the regulator whom they say should be canvassing to remove obstacles to the meter rollout scheme. However, NERC, BusinessDay learnt, is blaming DisCos for appointing meter asset providers who lack financial capacity.

Usman Arabi, NERC’s spokesman, was yet to provide a response to BusinessDay’s questions at the time of this publication.

While the operators and regulators muddy the waters, electricity customers continue to bear the brunt of unfair electricity pricing through estimated billing by DisCos.

According to NERC’s first quarter report, of the 8,840,801 registered electricity customers in Nigeria, only 3,793,895 or 42.9 percent have been metered as at the end of the period. Thus, 57 percent or over 5 million electricity customers are still on estimated billing which has contributed to customer apathy towards payment for electricity.

Since the setup of the MAPs programme, only about 33,000 new meters have been issued under the scheme, which is only about 4 percent of the over 750,000 applications for new meters. Abuja DisCo alone has issued about 30,000 meters.

The MAP Regulations issued by NERC in March 2018 aims to fast-track the rollout of end-use meters through the engagement of third-party investors for the financing, procurement, supply, installation, and maintenance of electricity meters.

According to NERC, a review of the customer population data indicates that only Abuja, Benin, and Port Harcourt DisCos had metered more than 50 percent of their registered customers as at the end of March 2019.

The disaffection by customers is seen in the fact that metering and billing accounted for about 61 percent or 92,626 of the 151,938 complaints from consumers in the first three months of this year.

OLUSOLA BELLO & ISAAC ANYAOGU