Nigeria to licence Meter Service Providers

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The Nigerian government is to license meter service providers as part of the measures to end estimated billing of electricity consumers in the country by 2020

 

  • Anayo Ezugwu

 

AS a measure to end estimated billing of electricity customers in the country, the Nigerian government is set to licence Meter Services Providers, MSP.  This is part of the business model by the federal government to bring estimated billing to an end in the next three years.

The Nigerian Electricity Regulatory Commission, NERC, will licence the MPS, who would, on a competitive basis, provide for the financing, procurement, installation, maintenance and replacement of electronic prepaid meters for end-users of electricity. The information is contained in a consultative paper for a regulation to end estimated billings of end-user electricity customers in the Nigerian Electricity Supply Industry, NESI, published by NERC.

The policy paper has the backing of Babatunde Fashola, minister of power, works and housing. According to NERC, the power distribution licensee is expected to enter into a Meter Service Agreement, MSA, with selected MSPs for the deployment of a specified number of meters within the tenure of the agreement in exchange for a monthly lease fee covering a period ranging from 10 to 15 years, thus enabling a full cost recovery over the technical useful life of the asset plus a provision for a regulated return on the investment.

Under this model, the distribution licensee is the lessee and the terms and conditions of the lease shall be mutually agreed between the parties. The commission stated that the meter services agreement shall incorporate service level obligation expected of the licensee during the tenure of the agreement, particularly in the area of installation, maintenance and replacement.

The commission has noted the critical role of metering in minimizing customer apathy and in particular ensuring the long-term financial sustainability of the NESI. The commission is therefore committed to rapidly bringing to an end the widespread practice of estimated billing for electricity consumption by ensuring the full metering of all electricity customers in Nigeria.

In this context, the commission has appraised the impact of the current challenges affecting the rollout of meters in the industry as well as other viable options in practice in other jurisdictions and hereby propose the following initiatives as a means of fast tracking the metering of all electricity customers in NESI by 2020. The commission has resolved to assiduously work towards bringing to an end the widespread practice of estimated billing through the provision of appropriate meters to all consumers.

It noted that upon the take-off of the proposed initiatives, all distribution licensees should be committed to an ambitious metering target as one of the cardinal requirements for restoring the financial viability of the NESI.

The NERC had earlier this month disclosed that only 201,756 meters were funded by the electricity distribution companies, Discos, since the power firms were privatised. A consultation paper for the regulation to end estimated billing in NESI by NERC showed that only the stated figure was financed by the 11 electricity distribution licensees since takeover on November 1, 2013.

According to the document, under the existing MYTO-2015 Distribution Tariff Orders issued by the NERC and the provisions of Performance Agreements signed with BPE, discos are allowed a prescribed level of Capital Expenditure, CAPEX,  to cater for customer metering, network rehabilitation, improvement and expansion of the network to areas currently not served. “However, actual performance has been far below the set targets with only 201,756 meters financed by the 11 electricity distribution licensees since takeover on 1st November 2013.”

As at July 31, the number of metered customers stood at about 3,451,611 representing about 46 percent of the total customer population of 7,476,856 on the billing platform of the distribution licensees.

 

– Oct 20, 2017 @ 12:35 GMT |

 

 

 

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