According to the Nigerian Electricity Regulatory Commission (NERC) the national metering gap as at 31st December 2017, stood at 4,740,275 units with the figures expected to rise. Consequent upon the continuing failure of electricity distribution companies (DisCos) to effectively discharge their duty of providing Meter Assets to their customers, the NERC issued the Meter Asset Providers Regulations 2018 (the Regulation). The Regulation has, chief among its objectives: closing the national metering gap through accelerated meter roll out to customers, the elimination of estimated billing, and attraction of private investment in the meter services provision in the Nigerian Electricity Supply Industry (NESI) among others.
Section 2 of the Regulation seeks to protect consumers from arbitrary and estimated billing while at same time improving the revenue generation base of the DisCos through effective metering of the actual units of electricity current used by a customer. Realising that the DisCos have failed in metering services, the Regulation creates a new set of market participants in the Meter Asset Providers (MAP) to undertake meter asset provisions and services. To ensure that DisCos concentrate on other aspects of the last mile service provision, DisCos and their core investors, subsidiaries, affiliates, directors and relatives are prohibited from participating in the business of a licensee Meter Asset Provider.
Section 8 of the Regulation provides a detailed but transparent procurement process covering the bidding process, grant of permit and the entering into Meter Service Agreement (MSA) and Service Level Agreement (SLA). These two agreements (MSA & SLA) are to define the relationship between the DisCo and the MAPs and the MAPs and the customer respectively. The MSA is to contain clauses such as payment structure, securitization acceptable to MAP, the DisCo’s meter deployment plan and a dedicated account to ring-fence all meter services charges paid by the customers for timely onward payment to the MAP and others. The SLA which governs the relationship between the Meter Asset Provider and the customers is to contain clauses such as instalment and metering standards, right of access to inspect and read meter etc.
By Section 14 of the Regulation, all customers are eligible for installation of an appropriate meter. Also, customers are entitled to replacement or repair of faulty meter within two working days of being notified of such faults. Further, under Section 16 of the Regulation, customers are liable to pay metering service charge which is to be clearly outlined as such in the service bill issued by the DisCo. The service charge payable by customers must be based on the outcome of the procurement process and subject to the approval of the Commission. This will therefore, make the service charge payable by customers across the country to vary from the sphere of operation of one DisCos to another.
While the Regulation has generally been considered by stakeholders in the NESI as a significant step towards the continuing unbundling of the NESI, certain
exceptions have been raised to some of its provisions. For instance, the 30% minimum local content provision has been faulted for not complying with NERC’s Local Content Regulations.
With effective implementation and monitoring, the Regulations could herald the dawn of a more competitive, transparent and efficient NESI, driven by private ventures as the success of the Regulations both in application and revenue generation, will strengthen investors’ confidence thereby attracting more private investment.