The federal government will support the take-off of an ancillary meter supply industry in Nigeria’s electricity market with a loan of N39 billion, the Minister of Power, Works, and Housing, Mr. Babatunde Fashola has said.
Fashola, at the 18th monthly meeting of power sector operators in Kano, stated that the government and Nigerian Electricity Regulatory Commission (NERC) were in talks with investors in the 11 electricity distribution companies (Discos) on a plan to have a separate meter supply industry that could bridge the metering deficits in the electricity market.
He said since the Electric Power Sector Reform Act (EPSRA) 2005 did not give Discos the monopoly to supply meters to their customers even though it was their duty, the government has considered the need to license meter providers to supply meters to customers on conditions approved by the NERC.
This development followed repeated complaints of Discos’ hypocrisy with meter deployment to their customers, as well as their mishandlings of an alternative meter supply initiative – the Credited Advance Payment for Metering Implementation (CAPMI), which allowed consumers to self-finance their meter installations.
Though the immediate past Acting Chairman of NERC, Dr. Anthony Akah, developed a framework to create a separate meter supply industry for the electricity market before he handed over to the current board of commissioners, it was, however, not clear if the same framework was what the government and NERC would adopt in the new plan unveiled by Fashola.
“Please re-call that government had in the past attempted to intervene in meter supply through CAPMI which ultimately I decided we should wind down because of the distrust and disaffection it was creating between consumers and Discos with Government caught in the middle with numerous petitions by customers who paid for meters that were not delivered within the approved time or at all,” Fashola said.
“Some Discos have come back to say that their customers still want to pay for meters and they can reach agreements with them on how to pay for it. Government will not stand in the way of such an agreement. It is consistent with the intent of privatisation envisioned by the Electric Power Sector Reform Act (EPSRA) or at least it does not violate the Act. What I will reiterate is that the Discos have the obligation to meter customers, because they are the ones who charge for electricity which must be measured.
If the customers and the Discos reach an agreement between themselves, where the customer assumes the responsibility of the Disco of his own free will, and NERC sanctions this agreement, then so be it,” the minister explained.
“The difference between this kind of agreement and CAPMI, is that it is not a government initiative which CAPMI was. However, through NERC, Government will monitor and regulate to ensure that Discos do not use this as an excuse to abdicate their responsibility to provide meters,” he added.
He added: “In addition to this kind of agreement, what government has decided to do is optimise the EPSRA provision to democratise access to meters, starting with the N39 billion, which will be a loan to the meter provider.
“While it is true that Discos have the obligation to meter customers, the law did not vest a monopoly of meter supplies, or even retail sales, in Discos. Anybody who qualifies under safety regulation by NEMSA and under licenses issued by the NERC can supply meters to customers under conditions stipulated by NERC.”
“In other words, meter supply is an open but regulated business. You need a license from NERC to undertake it. You need to comply with testing and safety standards of NEMSA to produce, import or install it but it is not a monopoly for Discos alone,” Fashola stated.
He said NERC will in this regard, issue regulations for meter service providers; meter and retail franchise operators; community aggregation services for sale of electricity and provision of meters; and low cost meter supply.
“Once the regulations are ready we will work with NERC to clarify and announce how to licence and implement the metering programmes. We have met with investors of Discos and discussed these intentions with them, and we will work with them through NERC to formalise the details. The successful implementation of this programme will help to reduce conflict between Discos and customers, ensure collection of tariff, reduce losses, improve liquidity and bring some relief to the finances of some Discos who cannot afford to fund meters,” the minister added.