By placing a limit on how much electricity distribution companies (DisCos) can charge some classes of customers on estimated billing, the Nigerian Electricity Regulatory Commission (NERC) has merely substituted resolving the failing metering programme with penalising DisCos already reporting poor revenues.
In its order to cap estimated billings which took effect February 20, NERC ordered that all unmetered R2 and C1 customers, basically residential and small business users, shall not pay more than N1,870 per month for energy consumed. Single-phased small users are not to pay more than N200 per month during the transitional period till they are metered.
While this populist order will meet with approval from many electricity customers who suffer outrageous billing from DisCos, industry analysts say the regulation does not address why many Nigerians cannot get meters to ensure equitable electricity billing. Yet, the regulator is well aware of the problem.
In paragraph 11 of its order, NERC after highlighting the problems MAPs was created to solve said, “However, several constraints including changes in fiscal policy and the limited availability of long-term funding have led to limited success in the meter roll out.”
After acknowledging the problems, the regulator has pushed the burden on resolving them on the regulated even when the problems reflected its inability at forging synergy with the Ministry of Finance and poor evaluation of the financial competence of the third-party investors it allowed to partner with the DisCos.
“This order by NERC does not address the problem at all, rather it makes the situation worse for the DisCos,” said Chuks Nwani, an energy lawyer based in Lagos. “NERC is not regulating the industry to grow.”
Last October, BusinessDay reported that the Meter Asset Provider (MAPs) plan was 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.
Following the introduction of the MAP regulations in March 2018, 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 leading to abandonment of thousands of meters at the ports.
Checks at the customer care offices of DisCos in Lagos show large swaths of people who are still disgruntled over the inability of their power companies to meter them. Some have filled forms in the last two months and are still waiting for officials to carry out an audit of their homes while others say they are yet to get a response after completing forms.
However, some analysts believe that while the regulator understands the issues, it has an obligation to protect consumers.
“The dilemma is that whilst NERC acknowledges that there are issues with the implementation of the MAP, they still need to protect consumers,” said Dolapo Kukoyi, energy lawyer and partner at Lagos-based law firm, Detail Commercial Solicitors.
According to data from the regulator, electricity customer population has grown from 5 million in 2012 to over 10 million as at December 2019 without about 52 percent of customers being invoiced on the basis of estimated billing.
“The legacy situation at acquisition of majority stake in the distribution assets from government was that the majority of customers were unmetered and there has been little change in the situation as the deployment of meters by DisCos has been outpaced by the growth in customer numbers in the Nigerian Electricity Supply Industry,” NERC said its order.
The blame for this situation has revolved between a regulator unwilling to hold the regulated to account and operators who have been accused of short-changing the people.
Estimated billing in the NESI is an example of how an aberration can morph into the norm. The 2007 Meter Reading, Cash Collections and Credit Management regulation enacted by NERC was created to enable DisCos to bill a customer when they are unable to gain access to his premises. Now it is the only way DisCos want to bill their customers.
Five years after power assets were handed over to core investors, estimated billing is now the most vexing issue in the sector representing over 55 percent of all customer complaints.
Prior to MAP, NERC created a credit scheme for meter payment but DisCos soon scuttled the plan. Unable to compel the DisCos to fulfil the requirements of their contracts, largely because it had failed to allow market price for electricity consumed, NERC proposed a Meter Asset Provider Regulation, which allows third party financiers to provide meter for a fee to consumers. That too is fast turning out to be a disaster.
ISAAC ANYAOGU
