Featured, Power
Anayo Ezugwu
THE Nigerian Electricity Regulatory Commission, NERC, has disclosed that only 201,756 meters were funded by the Electricity Distribution Companies, Discos, since the power firm were privatised. A consultation paper for the Regulation to End Estimated Billing in Nigerian Electricity Supply Industry, 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. Abuja Disco with a customer population of 862, 696, was able to meter 49, 775 from 2013 to 2016 under CAPEX and only funded 2, 506 making a total of 52, 281. The company has a metering obligation per year of 96, 000.
Benin Disco has a customer population of 771,226. Of this figure only 113,627 were metered from 2013 to 2016. The company has a metering obligation of 264, 000 per year but has failed to meet this target. Eko Disco with a customer population of 442,201 had metered only 71,021 within the years under review. EKEDC has a metering obligation per year of 204,000.
The Enugu Disco with 809,829 customer base, was able to metre 1,772 within the years reviewed. The disco has a metering obligation per year of 48,000. Ibadan Disco has the largest customer population of 1,474,364. However, it was able to metre 186,766. It has a metering obligation of 217,611 per year.
Ikeja Disco has 835,736 registered customers under its care. The company did not provide the number of meters customers paid for since privatisation, however, 60,852 were funded by the company. It has a metering obligation per year of 120,000. The Jos Disco has 384,691 customer base. It said customers paid for just 63 meters while it metered only 3,641 customers. It has a metering target of 100, 000 yearly.
Kaduna Disco has a customer base of 641,582. The company provided 49,569 meters to customers from 2013 to 2016. It has a yearly obligation of 187,200. Kano with 472,453 customers signed onto it. The Disco said it had metered 2,182 households. It has a yearly obligation of 100, 000.
Port Harcourt Disco with a customer base of 488,600 has metered 65,756 customers so far within the years reviewed. The company has a yearly obligation of 252,000 meters. Yola Disco with a registered customer base of 293,478, had 5, 085 customers metered so far. The company has a metering obligation per year of 51, 600 meters.
In all, there were 7,476,856 registered customers under the Discos. While 410,796 paid for their meters under CAPMI, the Discos were able to fund a combined 201,756 installed meters, making a total of 612,552. The combined metering obligation of the Discos per year amounts to 1,640,411 meter.
A report submitted in February 2012 by the then Presidential Task Force on Power, PTFP, showed a customer population of only 5,113,135 and a metering gap of 53 percent. With an updated customer population of 7,476,856 in August 2017, NERC said the ongoing obligated customer enumeration by the Discos would bring in a significant number of unmetered customers into the database of the distribution licensees thereby creating wider opportunities for investment in the financing of electricity meters for end-user customers.
A number of the licensees just commencing the enumeration exercise have recorded up to 300 percent increase in customer population in some areas thus reaffirming this growth potential, according to the commission. “Customer numbers are also expected to grow considering that the MYTO 2015 financial model projected a conservative new customer growth rate of nine percent per annum – an additional 300,000 to 500,000 meters shall be required every year over and above the metering rollout commitments made by the distribution licensees in the respective Performance Agreements signed with BPE.”
Other areas of growth in metering are the replacement of defective meters and the large base of technically obsolete electromechanical meters which are estimated at 1,725,806, that is, 50 percent of 3,451,611 installed meters.
Having highlighted the fallouts of the metering process, NERC blamed the Discos underperformances on their inability to raise funds, including tariff debts owed by customers.
‘It is generally considered that the capping of CAPEX by the commission as a basis for managing the spike in end-user tariffs was partly detrimental to the attainment of the required level of metering in the industry but the main constraint was the inability of the Discos to raise adequate financing for their capital investment requirements. A recurring consideration that has impacted on the ability of the NESI licensees to raise long-term finance has been the impact of accumulated tariff shortfalls in the books of the distribution licensees arising from the current liquidity challenge in the NESI.”
MYTO 2015 was introduced after the failure of the Credit Advance Payment for Metering Initiative, CAPMI, recommendation of the Panel of Inquiry on Metering in NESI. The commission had in the year 2013, introduced the CAPMI scheme under which willing customers paid for electricity meters through an escrow account jointly managed by the distribution licensees and the Meter Vendor and Installer.
Under CAPMI programme, customers financed the supply and installation of electricity meters in their premises and the cost include 12 percent interest recovered in the form of electricity credit over an agreed period with the discos. However, the CAPMI scheme, which initially proved to be a viable option, became riddled with a lot of challenges which included the inability of NESI and failure of the discos to procure the meters at the rates approved by the commission, and the prescribed installation of the meters at customers’ premises within the specified 45-day period allowed in the CAPMI order.
The commission eventually discontinued the CAPMI scheme in September 2016 and directed the distribution licensees to commence the full implementation of their metering schemes in accordance with their five-year metering roll-out obligations under the performance agreements signed with the Bureau of Public Enterprises.
– Oct 12, 2017 @ 19:08 GMT
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