Estimated billing, metering, service interruption still Nigerian electricity customers’ biggest pains

Almost seven years after the power sector in Nigeria was privatised, electricity customers still identify estimated billing, lack of meters and frequent service interruption as their biggest pains, defying every attempt at remedy.

In the newly released quarterly report of the Nigerian Electricity Regulatory Commission (NERC), the 11 power distribution companies (DisCos) received a total of 204,506 complaints during the first quarter of 2020. This translates to an average of 2,247 complaints per day compared to a daily average of 1,933 complaints received in the preceding quarter.

According to NERC’s data, 22.69 percent of all complaints received by DisCos are related to billing, 20.27 percent to metering, and service interruption accounted for 18.40 percent of all complaints. Others were disconnection which accounted for 12.06 percent of the complaints, and delayed connection which accounted for 6.55 percent of all complaints.

NERC has also set up forum offices that can constitute panels to review unresolved disputes, as enshrined in the Commission’s Customer Complaints Handling Standards and Procedure (CCHSP) Regulations.

As of 31 March 2020, the Commission had 30 operational forum offices in 29 states and the FCT. They had a total of 2,881 complaints during the quarter (including 1,258 pending complaints from the fourth quarter of 2019) from customers who were dissatisfied with DisCos’ decision on their lodged complaints.

According to the commission, complaints around billing accounted for 48.63 percent of all cases and metering complaints were responsible for 33.22 percent of all cases reviewed.

An analysis of NERC’s previous reports indicates a similar pattern, raising questions on the efficacy of programmes by the government and sector players to resolve the issues.

NERC in February placed a limit on how much power distribution companies (DisCos) can charge some classes of customers on estimated billing. All unmetered R2 and C1 customers, basically residential and small business users, would not pay more than N1,870 per month for energy consumed. Single-phased small users were not to pay more than N200 per month during the transitional period till they are metered.

The order, while popular, did not address why many Nigerians cannot get meters to ensure equitable electricity billing. The regulator identified constraints including changes in fiscal policy and the limited availability of long-term funding that have led to limited success in the meter roll-out, yet it pushed on the regulated the burden of resolving them.

The net effect is that the regulator was incapable of handing out real sanctions against DisCos for not capping estimated bills to customers and could not resolve the growing angst by customers. Though complaints reduced in some DisCos based on the regulation, overall, it was not a sufficient deterrent.

Estimated billing in the Nigerian Electricity Supply Industry is an example of how a solution can become a problem. 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, but it soon became DisCos’ most favoured method of billing customers.

Customers are dissatisfied with the method because billings are now based on DisCos’ discretion rather than customers’ consumption.

To address these challenges, the regulator introduced the Meter Asset Providers regulation in 2018 which allowed for third-party investors to supply customers meters for a fee, repayable in instalment or at once.

However, most MAPs lack access to long-term funding, and the government’s introduction of a 35 percent levy on meters, ostensibly to encourage local production, soon worsened the situation.

The records of the Commission indicate that of the 10,477,856 registered electricity customers as at the end of the first quarter of 2020, only 4,231,940 (40.39 percent) have been metered.

“Thus, 59.61 percent of the registered electricity customers are still on estimated billing which has contributed to customer apathy towards payment of electricity bills,” NERC said.

To resolve this, the Federal Government through the Central Bank and the World Bank is providing over $350 million in funding, largely for local meter manufacturers, to ensure that over 6 million Nigerians are metered within the next five years.

Isaac Omoyeni, general manager (operations) at New Hampshire Metering Services Limited, one of the approved MAPs by NERC planning to roll out over 400,000 smart prepaid meters for Ikeja and Ibadan DisCos, said that local meter manufacturers who are also MAPs may not be able to meet the demands alone and would require a combination of importation of fully built prepaid meters to bridge the current deficit in local meter assembly capacity and massive investments in local meter assembly lines.