Discos Face Sanctions as Metering Scheme Suffers Delay
Electricity consumers have yet to feel the impact of a scheme introduced last year to expedite the deployment of meters as its implementation has been delayed, ’FEMI ASU writes
When the Nigerian Electricity Regulatory Commission unveiled the Meter Asset Provider Regulation in March last year, electricity consumers who were being subjected to estimated billing by power distribution companies hailed the initiative.
The MAP regulation, which introduced a new set of service providers in the power sector called meter asset providers, was designed to fast-track the roll-out of meters through the engagement of third-party investors for the financing, procurement, supply, installation and maintenance of electricity meters.
The Discos were required to commence the procurement process of engaging meter asset providers to serve their service areas in accordance with an approved roll-out plan.
With the regulation becoming effective on April 3, 2018, the Discos were expected to, within 120 days from the effective date, engage the services of MAPs towards the achievement of their three-year metering targets prescribed by NERC.
But more than nine months after its introduction, the impact of the metering initiative has not yet been felt by consumers as the process of procuring MAPs has not been concluded by the Discos.
The regulator, which only announced on May 23 that it had cleared 22 firms intending to participate in the meter procurement process to be conducted by the Discos, had to extend the deadline for the procurement to October 31.
According to the MAP regulation, the distribution licensees (Discos) and the MAPs shall enter into a metering service agreement, which shall provide for the number of meters to be installed in the distribution licensee’s network over an agreed period and the recovery of the cost of meter asset plus a reasonable return over a period of 10 years, among others.
NERC said the number of firms seeking to become MAPs rose to 115 as of November 22 from the 101 that were granted ‘No Objection’ as of October 17.
The President, Electricity Consumers Association of Nigeria, Mr. Chijioke James, said in a telephone interview with our correspondent that the delay in the procurement of MAPs “automatically has continued to foist hardship on the consumers.”
He said, “I think the delay may be intentional. Maybe some people within the Discos are sabotaging the MAP scheme, because I see no reason why you want to collect your money and the instrument that you need to collect the money is lacking.”
“If you say you are a distribution company, your primary tool of operation is the meter. How can you distribute and you are finding it difficult to invest in what you will use to collect revenue to defray your costs? The system is such that the consumers are at the receiving end; that is our challenge.”
NERC, in its latest quarterly report released this month, noted that the metering gap for customers still remained a key challenge facing the Nigerian electricity supply industry.
It said out of the 8,310,408 registered electricity customers, only 3,704,302 (about 45 per cent) had been metered as of the end of the third quarter of 2018.
“The majority of customers (55 per cent) are still on estimated billing, thus contributing to customer apathy towards payment for electricity,” the commission said.
It said it had intensified its monitoring of Discos’ implementation of and compliance with the provisions of the MAP regulation in order to fast-track meter roll-out and close the metering gap within three years.
“NERC is not doing enough as the regulator. We have a situation where the consumers hardly get justice. If NERC is serious about protecting the consumers and has put in place a guideline regarding when consumers must be metered, the Discos should be sanctioned if they fail to comply with that guideline,” James said.
Last week, a bill seeking to amend the Electric Power Sector Reform Act, prohibit and criminalise estimated billing passed the second reading at the House of Representatives.
“What informed that bill was the unjust and exorbitant estimated billing that consumers are made to bear,” the ECAN president noted.
The Deputy Director, Consumer Affairs at NERC, Mr Shittu Shaibu, told our correspondent on Friday that the procurement process was being finalised, saying, “In fact, we invited every Disco to come and give us their update because, by January 1, we expected that at least some innovations would take place after the completion of the MAP procurement process.
“All of the Discos have come to see the commission and we are hoping that before the end of this month their reports will be in and we will definitely make the scheme take off. Ideally, by the end of October, the MAP process was supposed to have been concluded after the extension by the commission, so that as from November 1, we expected to have got some reports for the commission to review and give permits to the Discos.”
According to him, some of the Discos have submitted their reports while others are finalising theirs.
Asked what was responsible for the delay, Shaibu said, “There were issues of comparability and interoperability. Both the bidders and the distribution companies had some slight issues in terms of the procurement process, especially the technical evaluation.
“It will not be fair to bring meters that will not be compatible with the billing system, considering the fact that they will not be there for a long time. Those are some of the reasons the Discos are putting forward for the delay. All the same, the commission is on top of the issue and ensuring that the scheme takes off as quickly as possible, because Nigerians are already clamouring and the commission has already put out a paper to cap their estimation.”
According to him, the commission will ensure that the Discos don’t do anything that will jeopardise the MAP initiative.
Shaibu said, “There are a few hitches because this is the first time something like this is being done. The Discos have shown positive signs of wanting to do it. Moreover, it is not an issue of whether they want to do it or not; it is compulsory that they do it because if Nigerians are to be metered the way we want it, there has to be a way out and this MAP is an avenue by which funds will come towards the procurement of meters.”
“For now, all the Discos are already guilty of delay and usually when you have delays in the implementation of anything, the commission, of course, applies sanctions, and this one will not be an exception.”
Last Friday, the Minister of Power, Works and Housing, Mr Babatunde Fashola, said the MAP policy would ease the financial pressure facing Discos as new investors would come into the metering space.
“Just in the way the Gencos and Discos were licensed, we are going to license them too as meter asset providers in the value chain of power supply.”
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