The Nigerian Electricity Regulator Commission (NERC) has capped the price of electricity meters but without fixing a standard that Electricity Distribution Companies (Discos) can order from providers. Local manufacturers say they are finding it difficult to keep up with varying standards.
In the Nigerian electricity supply industry, the regulator and the Nigerian Electricity Management Services Agency (NEMSA) approve the standard of electricity meters used by consumers but Discos are consulted in the process to ensure that the meter supplied meet the needs of their market.
“The regulator has capped the price of electricity meters but the regulator has not capped the specifications or the requirements that the DisCos can ask for,” said Yahaya Yahaya, company secretary of Momas Electricity Meters Manufacturing Company Ltd (MEMMCOL), a local meter manufacturing outfit, in an interview following BusinessDay’s visit to the company’s plant in Ogun State.
“So what we find is that while the regulator has capped the price of metering at the price of a Toyota, you have left the Discos the unfettered discretion to ask for a Mercedes and you leave the metering company to perform by hook or crook,” Yahaya said.
“The regulator recently increased the price of meter, but there is also a need to cap or give the maximum specifications that the Discos can hand over to MAPS otherwise, you put the MAPS in a very difficult situation.
Over 6.5million electricity customers have no meters to measure their output hence the regulator, NERC, created a Meter Asset Providers (MAPS) policy, wherein third-party investors can provide meters to customers for a fee in 2018.
However, local meter manufacturers say that Discos have different specifications for the meters they want and this is because “the standards for metering as laid down by NERC and NEMSA according to the metering code is very vague,” Yahaya said.
“We found the 11 Discos have different specifications for electricity meters, that means a factory like ours is not able to invest in production and stock it in the warehouse because if you stock the meters in the warehouse, you are going to need an off-taker, so if you do not have a guarantee off-taker or an offtake agreement, it will be very difficult for you to make that type of investment.
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Local meters producers say the effect of these varying standards is that when a meter is damaged, it would be difficult to get exact replacement parts. It will counter the creation of ancillary component manufacturing plants for bolts, screws, panels that would have existed if standards are uniform.
Nigeria’s vast metering gap has created over $600 million markets for meters and component parts but without a uniform standard, the country will continue to ship jobs abroad and exhaust scarce foreign currency on meters and related components.
However, the Discos say that a uniform meter standard will be hard to achieve due to the peculiar nature of the market they serve. Some request for higher quality meters to protect against tampering. Some Discos in the north say they require cheap meters to serve customers in mud houses.
To assuage some of these concerns, including foreign exchange challenges, NERC increased the price of single-phase electricity meters by 21 percent to N44,896.17 and three-phase meters by 23 percent to N82,855 in June.
“In arriving at the approved unit costs, the commission has considered the recent changes in foreign exchange approved by the central bank and the applicable rates available to importers of meter components and/or fully assembled meters through the “Investors and Importers” forex window,” NERC said.
Nigeria’s metering space comprises importers of meters, those who assembly Semi Knock-Downs (SKDS) components to assembly and Original Equipment Manufacturers (OEM) and develop their own software and hardware solutions, like MEMCOL.
The company, founded by Kola Balogun, employs over 250 Nigerians and produces about 20,000 meters on average, every month.
