NERC Bungles National Mass Metering initiative

NERC Bungles National Mass Metering initiative

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Chairman of the Nigerian Electricity Regulatory Commission (NERC), Engr Sanusi Garba, has disclosed that phase one of the National Mass Metering Project (NMMP), which is targeted at one million unmetered houses across the country and billed for execution between October 2020 and April 2021, has only attained 13 per cent implementation as at March 19, 2021.

Engr Sanusi Garba who spoke following an interactive session between the Senate Committee on Power, NERC officials, and representatives of the DisCos, in Abuja, stated that out of the N59.2 billion earmarked, the Central Bank of Nigeria (CBN) has so far released only N33.2 billion to electricity Distribution Companies (DisCos) in the country.

Nevertheless, the performance implementation, as observed by lawmakers during their oversight duties, was nowhere commensurate with the monies disbursed so far. Not pleased with the performance report reeled out by the NERC chief, members of the committee chaired by Senator Gabriel Suswam took turns to berate the Commission and the DisCos. According to Suswam:

“Your performance report on the Mass Metering Project is not impressive and encouraging at all. Nigerians are not happy that all effort being made by the Federal Government to get electricity consumers metered is being thwarted in one way or the other. Estimated billing is not acceptable and that is the reason why the intervention was made.

“In the light of this, this Committee will want your Commission and the DisCos to appear before it again by the end of next month to see whether the assurance given on better performance will be done or not.”

With a history of unstable power supply in spite of the huge figures to revive it, consumers have continued to suffer extortion and estimated billings from inefficient electricity distribution companies. One of the major problems has always been poor metering. Lack of metering has evolved from being a pre-privatisation malady to a post-privatisation one.

According to statistics, the number of unmetered customers across Nigeria has continued to witness a surge. In 2016, a metering status report from the Nigerian Electricity Regulatory Commission (NERC) showed that about 3 million of the registered accounts of customers were unmetered. In 2017, the number grew as NERC reported over 4 million unmetered customers. In 2019, a NERC report showed that over 5 million Nigerians were unmetered and this number has continued to rise.

The Buhari-led administration introduced the National Mass Metering Project (NMMP). On August 26, 2020, the president directed that there should be a nationwide mass metering programme for electricity consumers in the country. This was an effort by the Federal Government to put an end to estimated and arbitrary billing for electricity. As the Minister of Power, Eng. Saleh Mamman, puts it:

“The Nigerian electricity market has, for many years, struggled with inadequate revenues, thus creating significant liquidity challenge for all market participants in the value chain. One of the major contributors to the funding challenge is the low level of metering for end-user consumers.

“This is the principal reason for customer’s resistance to the payment of electricity bills, due to the perceived lack of confidence and trust in estimated billing. The often-repeated reason for the low level of metering has been attributed to the inability of Distribution Companies (DisCos) to raise financing for the purchase of meters.”

With the April 2021 deadline for the first phase, the 13% below par performance recorded by NERC, cast shadows on the success of the overall scheme, and whether it will not follow the failure of other schemes launched in the past. For instance, the Credit Advance Programme for Metering Implementation (CAPMI) scheme was launched in 2013 at the onset of the privatised electricity sector. The scheme was designed to relieve the Distribution Companies (Discos) of the burden of financing the cost of the meters. It therefore allowed customers pay for meters in advance, while the Disco liquidate the cost through electricity supplied to the customer over a particular period of time. Nevertheless, the scheme failed to deliver on its core objective and was discontinued in 2016, leaving the sector with at least a 50% metering gap.

In a bid to address the same problem, the Meter Asset Provider (MAP) scheme was introduced in 2018. Third-party meter suppliers were incorporated under the scheme. The suppliers were to be engaged by the Discos, effectively removing the burden of providing meters from the Discos. The scheme was equally not as successful as expected, with Discos missing deadlines to engage MAPs, and MAPs facing the challenge of increased import tariffs and lack of local manufacturing capacity.

The National Mass Metering Programme (NMMP) was introduced with a view to funding local production and importation of meters. With the addition of the NMMP facility to CBN’s existing N213billion Nigerian Electricity Market Stabilisation Facility (NEMSF), significant progress is yet to be seen from this facility gathering.

While it is hoped that the NMMP will help close the metering gap, it is dismal that almost a decade after the privatisation of the Nigerian electricity sector, the Discos are unable to tackle one aspect of Aggregate Technical, Commercial and Collection (ATC&C) losses while putting the burden of metering or estimated billing on the customer. This is in view of epileptic power supply.

Even before now, analysts have faulted some of the frameworks that guide the implementation of the NMMP, which, if not addressed, might end up like the MAP and CAPMI. It was noted that there is a seemingly lack of clarity in the Central Bank’s framework for the financing of the programme which could lead to a clash with NERC. This is evident as Garba attributed the poor performance to delay in disbursement of funds, the chunk of which he said was made available to the DISCOs in February this year. In his words, “disbursement of the releases was very slow”.

A policy brief titled, ‘The Framework for Financing the National Mass Metering Programme: Matters Arising’, also faulted the classification of the DisCos and Local Meter Manufacturers and Meter Assemblers (LMMA) as downstream and upstream operators.

According to the authors, Oluwatosin Owoeye, an energy analyst, and his counterpart, Osawese Esamah, an energy lawyer, they noted that although the classification of the LMMA as the upstream participant is right, the Meter Asset Providers (MAP) should be the correct downstream participant and not DisCos, based on the extant MAP Regulations.

According to them, there are immense economic benefits to the Federal Government if the contractual relationship between the LMMA and MAP is adopted. For example, MAPs are tax-paying entities, thus, the government would earn more tax revenues under this contractual relationship.

Both critics noted that this upstream/downstream provision of the CBN framework is in conflict with the MAP Regulations which allows for 70 percent of the meters to be imported from overseas, while 30 percent is to be procured from local meter manufacturers.

Read Also: Customers Who Paid for Meters To Get Refund-NERC

They suggested that the CBN framework should allow importation of fully assembled prepaid meters by MAPs within a specified period, while maintaining that “the power sector cannot afford to continue to bleed revenues while waiting for one hundred percent local content in the metering implementation.”

The Minister of State for Power, Mr Goddy Jedy Agba, had also warned importers of electric meters against breaching the country’s standards, insisting that henceforth all meters imported into the country must be satisfied and tested and they must meet the country’s technical requirements.

But can this be carried out without the usual bureaucratic process which will also tell on the timeframe? These are some fundamental issues raised by observers. As Nigerians look forward to what the NMMP initiative will bring, the myriad of cases of government’s creditable initiatives and projects resulting in slapdash approaches caused by shoddy monitoring and handling, continues to pose a problem.

Peters Abodunrin

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