A Review of the Nigerian Energy Industry

44% of electricity consumers not metered – NERC

Electricity metres
Electricity metres

*To cap bills to force hand of Discos

Oscarline Onwuemenyi

02 June 2015, Sweetcrude, Abuja – The Nigerian Electricity Regulatory Commission has disclosed that more than 44 percent of electricity consumers in the country do not have meters and are thus victims of indiscriminate estimated billing by the distribution companies (Discos).

It therefore said it will begin a process that will cap the revenues that the Discos can generate from their customers through estimated billing.

The new measure, according to the regulatory agency has become necessary in order to force the distribution companies to provide meters for their customers.

Speaking on Tuesday at a public hearing on Estimated Billing in the Power Sector, in Abuja, the Assistant General Manager in charge of Customer Service Standard at NERC, Mr. Shittu Lawal pointed out that electricity customers have borne the burden of inadequate metering across the country.

According to him, “Over 44 percent of registered electricity consumers in the country do not have effective metering systems. This is unacceptable.”

Shittu noted that the proposed capping system would encourage the distribution companies to ensure adequate and effective metering of all consumers.

The Commission, in a recent statement obtained by our correspondent in Abuja, had hinged the proposed measure on increased complaints of consumers over exorbitant bills by electricity distribution companies, popularly known as DISCOS.

It stated that, “Following the barrage of complaints lately received over estimated billings, the Nigerian Electricity Regulatory Commission (NERC) is considering placing a ceiling on maximum amount an electricity distribution company can charge a customer as estimated bill.

“Already, the Commission is inviting comments and submissions from members of the public to participate at a hearing to consider maximum amount chargeable by an electricity distribution company as estimated bill.”

NERC explained that the spirit behind the proposed ceiling on estimated billing was to provide the distribution companies’ incentive to roll out meters so that the customers will pay for what they consume as well as reduce mounting complaints over estimated billings.

Further justifying the planned action, the Chairman of NERC, Dr. Sam Amadi noted that, the context of this proposed regulation was the realisation that distribution companies are not doing enough to meter millions of unmetered customers in the country.

He noted that since the takeover of the networks by preferred bidders on November 1, 2013, government had not seen aggressive metering as promised by the preferred bidders, saying that this has led to over-billing of customers, especially in the face of dwindling supply of electricity.

Amadi said that the excuse of lack of funds to provide meters for customers by the distribution companies was untenable as they have failed to utilise the Credited Advance Payment for Metering Initiative (CAPMI) recommended to them by the Commission.

CAPMI allows distribution companies to collect payment for meter from willing customer and refund the customer through a portion of his tariff over a period of time and with interest.

He also called on increased advocacy to protect consumers against undue exploitation from power distribution companies.
“One of the observable gaps in the emergent electricity market in Nigeria is the absence of knowledgeable, credible and broad based advocacy for electricity consumers.”

Amadi noted that information asymmetry was not in the interest of electricity market even as he advocated geographical or occupational clusters of knowledgeable consumer advocates for the purposes of promoting accessibility and reliability of service in the market.

He said: “There is a noticeable under-representation of consumer voice, with superficial and adversarial tendency that lacks impact. This is in sharp contrast to the powerful position of the service providers, who though few in number, have the fund and negotiating power to push their demands, thus, a deficit in the democracy of the electricity market.

“A deficit occurs when the ordinary processes of governance of an institution creates and reinforces disempowerment of critical stakeholders of an institution. In this case, the system is the Nigerian electricity market and the critical stakeholder that is disempowered is the consumer.”

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