18 October 2017, Sweetcrude, Abuja – Plans are underway by the Federal Government to licence Meter Services Providers, MSP, as a measure to end estimated billing for electricity customers in the country.
It is part of a business model by the government to bring estimated billing to an end in the next three years.
Going by arrangement, 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, obtained in Abuja by SweetcrudeReports.
The policy paper, which was released by NERC, has the backing of the Minister of Power, Works and Housing, Mr. Babatunde Fashola.
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 lessor during the tenor of the agreement, particularly in the area of installation, maintenance and replacement.
According to the paper, “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 shall be committed to an ambitious metering target as one of the cardinal requirements for restoring the financial viability of the NESI.