In the new draft meter regulation proposed by the Nigerian Electricity Regulatory Commission (NERC), electricity customers in Nigeria could acquire meters through a 15-year lease facility from the DisCos guaranteed by third party meter providers.
This is coming two months after Babatunde Fashola, minister of Power, Works and Housing said a policy to reform meter supply in the country would be ready in October. NERC had published an advertorial in some national newspapers on Tuesday indicating it has released a draft regulation on its website but checks show it was not up at the time of filing this report.
However, the commission in October had published a consultation paper for a regulation to end estimated billing of end-user electricity customers in the Nigerian Electricity Supply Industry (NESI), which proposed a business model for the licensing of Meter Services Providers (MSP) by the Commission who would, on a competitive basis, provide for the financing, procurement, installation, maintenance and replacement of electronic prepaid meters for end-users of electricity.
“The distribution licensee would thereafter enter into a Meter Service Agreement (MSA) with selected Meter Service Providers (MSPs) for the deployment of a specified number of meters within the tenure of the agreement in exchange for a monthly lease fee covering a period ranging from 10 -15 years, thus enabling a full cost recovery over the technical useful life of the asset plus a provision for a regulated return on the investment,” says the document.
It continues, “Under this model, the distribution licensee is the lessee and the terms and conditions of the lease shall be mutually agreed between the parties. The Meter Services Agreement shall incorporate service level obligation expected of the lessor during the tenor of the agreement, particularly in the area of installation, maintenance and replacement.
Customers would make payments to MSPs through the collection Account of the DisCos or through the vending platform for all meters supplied by the providers.
While speaking at the Policy Dialogue on the Power Sector organised by the Lagos Chamber of Commerce and Industry (LCCI) in September, Fashola said other private businesses that are not DisCos would supply meters.
“The core business of the DISCOs is not meter supply, their core business is distributing power but it needs meters to do so. Therefore those who specialise in manufacturing, supplying and installation of meter would now go into that business subject to licence by NERC,” said Fashola.
By this rule, which BusinessDay gathered forms the basis for the draft regulation, Nigerians would pay for their own their meters which they would still not own because they won’t be allowed to remove them when moving houses.
Findings show that this intervention became critical because the DisCos have been incompetent at metering their customers. As at 31st July 2017, the number of metered customers stood at about 3,451,611, representing about 46% of the total customer population of 7,476,856 on the billing platform of the distribution licensees.
NERC has mandated DisCos to embark on enumeration exercise to know how many customers are using power. “A number of the licensees just commencing the enumeration exercise have recorded up to 300% increase in customer population in some areas thus reaffirming this growth potential.
“Customer numbers are also expected to grow considering that the MYTO 2015 financial model projected a conservative new customer growth rate of 9% per annum – additional 300,000 to 500,000 meters shall be required every year over and above the metering rollout commitments made by the distribution licensees in the respective Performance Agreements signed with BPE. Other areas of growth in metering are the replacement of defective meters and the large base of technically obsolete electromechanical meters which are estimated at 1,725,806 i.e. 50% of 3,451,611 installed meters,” says NERC.
ISAAC ANYAOGU
