A few weeks ago, The Nigerian Electricity Regulatory Commission, NERC, issued permits to Meter Asset Providers, MAPs, with a directive that they begin the rollout of new meters by May 1, 2019. Hardly had the directive been issued that one of the licensed meter asset providers screamed that the directive was unrealistic. The deadline had since passed and the majority of Nigerians are still without a pre-paid meter. Babajide Okeowo in this report takes a look at why getting a prepaid meter in Nigeria is akin to treading a camel through the eyes of the needle.
The issues of estimated billing and lack of prepaid meters have been at the front burner of discourse amongst electricity consumers in Nigeria for a long time. According to the third-quarter report by the Nigerian Electricity Regulatory Commission, NERC, released in January 2019, the metering gap for customers still remained a key challenge, facing the Nigerian electricity supply industry. The report stated that out of the 8,310,408 registered electricity customers, only 3,704,302 (about 45 per cent) had been metered as at 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,” it said.
Under the estimated billing regime, at monthly intervals, consumers are slapped with outrageous bills that have no bearing whatsoever on the quality or quantity of electricity supplied or consumed. This state-sanctioned fraud has managed to survive over the years due, in the main, to weak regulation, as NERC has found it difficult to curb the excesses of the DisCos. Deadlines set by NERC for the provision of prepaid meters have been blatantly flouted with no consequences while consumers are left to bear the brunt.
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According to Osilaja Olaere, a resident of Oke-Ira community, who recently led a protest to Ikeja Electricity Distribution Company, IKEDC, over the non-metering of the community, IKEDC deliberately refused to give the community prepaid meters.
“We are tired of being deceived by IKEDC. We are not going to accept the estimated bills anymore. House rent is now cheaper than electricity. We are not going to tolerate this anymore. We would continue to carry out peaceful protests until they hearken to our cry. For more than three years now, we have been cheated by Ikeja Electric and we are not going to take that any longer. We are shutting down payment, as from today until they bring prepaid meters for us,” Osilaja said.
Similarly, Chijioke James, President, Electricity Consumers Association of Nigeria, said there was a need for NERC to impose sanctions on the DisCos, which do not provide their customers with meters to serve as a deterrent.
I think this may be intentional. Maybe some people within the Discos are sabotaging the MAP scheme because I see no reason 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,” he said.
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.
Nigerians cannot get prepaid meters because DisCos want to cheat
Sam Amadi, a former chairman of the Nigerian Electricity Regulatory Commission (NERC), says estimated billing might not end soon because electricity distribution companies (DisCos) are trying to cheat.
Amadi made this revelation while answering questions on the Meter Asset Providers (MAPs) regulation initiated by the commission at a programme on Arise Television, monitored by this reporter. Amadi said the scheme was not a good policy compared to the previous metering intervention put in place by the commission.
“First, we should admit that estimated billing might not go out quickly for some reasons. One, you have to deal with issues of metering and, of course, the incentives of DisCos, trying to cheat where they can. I think MAP wasn’t a very good policy in the first place. We had the Credited Advance Payment for Metering Initiative, CAPMI in 2013 to fill the huge metering gap and resolve funding challenges. The scheme allowed customers to pay for the meter and the cost is refunded in the form of credit units over a period of 36 months with interest. Since DisCos do not have the kind of finance in terms of borrowing from banks or elsewhere to finance the massive deployment of meters as required in the industry, customers now provide that fund; that plan is far superior in my view to MAP,” Amadi said.
Present demand for prepaid meters exceed 4 million
According to an investigation by The Nigerian Xpress, the present demand for pre-paid meters is in excess of four million with many consumers even ready to pay for the meter, which initially was to be distributed free to consumers.
According to Mr. Femi Ige of Melody Community in Abule-Osho area of Ifo Local Government, he is ready to buy the prepaid meter to do away with the never going away problem of estimated billing and the attendant harassment by IKEDC officials, who are in the habit of always disconnecting his power supply.
“I have gone repeatedly to the undertaking’s office, servicing my area to beg them that I want to buy the prepaid meter; I am ready to buy this meter. I am tired of the constant issue of estimated billing. Imagine, I live in a three-bedroom flat with erratic power supply and at the end of the month. I am given a bill of N15, 000 when it is not a commercial area. As if that is not enough, IKEDC officials, who will come and cut my light for failing to pay the bill that I did not use, constantly harass me. So, I cannot wait to get a prepaid meter and be done with their constant wahala [sic]”, he lamented.
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Why MAP may fail
On April 3, 2018, the NERC introduced the MAP regulation to new investors in the power sector to fast-track the roll-out of meters through the engagement of third-party investors.
Section 4(3) of the MAP Regulation 2018 requires all electricity distribution licensees to engage MAPs that would assist, as investors, in closing the metering gap and thus eliminating the practice of estimated billing in the Nigerian Electricity Supply Industry, NESI.
However, The Nigerian Xpress has gathered from a very reliable source, who does not want his name in print that “this scheme might fail due to a variety of reasons.”
According to him, MAPs lack expertise and procurement capacity finance wise to handle the demand of consumers. Bear in mind that the MAP regulation is not only about ending estimated billing and entrenching transparency but a process of enhancing local capacity in metering manufacturing.
The policy expects indigenous meter producers to close about 30 percent local content gap in the supply of meters to Discos while the rest is imported. We all know the various challenges facing the manufacturing industry in Nigeria, where will most of the MAPs get the required funding to embark on the production of meters to address 30 percent of 4 million plus requests. We will require a high level of support from government and the Central Bank of Nigeria, CBN to be able to deliver on the extent of the volume of meters to be deployed across the country. There is a need to have credit facilities to the tune of N10 billion to N20 billion for each manufacturer at a single digit interest rate.
The issues of transparency and disclosure on the part of the DisCos, among other hiccups also has the tendency to disrupt the scheme.
Similarly, for the meters that are imported, there is financial incapacity to clear the consignment. “ I have a container of meters currently rotting away at the Apapa port because we have been unable to come up with the funding required to clear it. The financial commitment expected from the DisCos are not forthcoming, so all these are some of the reasons why the MAP scheme may fail,” a meter importer said.
On his part, Mr. Kola Balogun, the Chairman of Momas Electricity Meter Manufacturing Company Ltd., one of the MAPs, there are several procedural issues that were not considered by NERC before the directive was issued.
“NERC did not consider that local meter manufacturers require ample time to study the meter specifications to enable them to produce to standards. In the first instance, consumers need to be educated about what is expected of them to have access to MAP licensee. “Secondly, consumers have to be informed on the methods of acquiring meters, whether by payment or by investment. “Lastly, every manufacturer (licensee) that wants to roll out meters needs the grace of three months to enable them to have the meters available in their warehouses. The modality to start rolling out meters has to be put in place vis-a-vis all the various documentation that are required and the infrastructure that will make deployment a smooth running,” he said.
Further, he said that the time-frame is just too short to make an impact. If we were licensed in April, three months are enough for us to prepare, which is April, May, and June; while in July, we start implementation. Except for a few numbers of us who have some stock at hand that can roll out, the modality to roll out is also a question.
“Apart from NERC giving licences, we still need processes to be put in place before meters will get to consumers because we need to train the meter installers, they need to be adequately trained on installation in consumers’ premises. Consumers also need to be educated on payments; there will also be an Escrow account in the process.
“These are challenges that require a long period. While that one is going on, anybody who wants to place an order from manufactures will also be signing a contract agreement for the meters. Those who want to import will also be making orders for importations,’’ Balogun explained.
