DisCos seek CBN funded massive meter rollout to address power challenge

By CONSTANCE ATHEKAME

Power Distribution Companies (DisCos) have advocated a Central Bank-funded massive meters roll-out project, to ensure that electricity customers were adequately metered.

The DisCos said on Thursday in Abuja that the massive roll-out of meters would assist in the full take off of the proposed Service Reflective Tariff (SRT).

Mr Sunday Oduntan, Executive Director, Research and Advocacy, Association of Nigerian Electricity Distributors (ANED) made this known in a statement.

Oduntan said that the DisCos spoke at the House of Representatives Public Hearing on the power sector.

Speaking on behalf of the DisCos, Mr Ernest Mupwaya, Managing Director of Abuja Electricity Distribution Company (AEDC), disclosed that historically, the Capital Expenditure (CAPEX) provision in Nigeria’s electricity tariff had been inadequate to cover the cost of metering customers.

Mupwaya explained that DisCos did not include any CAPEX allowance for metering, in case Meter Asset Provider (MAP) regulation fails.

“Over the years, there has been insufficient investment in customer metering, due to inadequate Multi Tariff Order (MYTO) CAPEX and uneconomic tariff.

“The approved CAPEX for DisCos has never been adequate for comprehensive metering,” he said.

Mupwaya stated that the DisCos were recommending that since they no longer had a provision in their CAPEX for metering, CBN should help the electricity supply industry by providing funds for emergency mass metering projects.

He said that the project would take place over a period of 18 months.

Mupwaya noted that in Quarter One, 2020, the number of registered customers in Nigeria Electricity Supply Industry (NESI) passed the 10 million point.

He said that NESI was growing at an average rate of 75,000 new customers every month, adding that many of them were still connected without a meter.

According to him, the metering penetration has decreased from 45.5 per cent in January 2017 down to 40.3 per cent in March 2020.

“Plugging the metering gap that is in excess of six million meters has been slow because even the recently introduced MAP regulations incorporate inappropriate meter pricing and so, it is not working as NERC/DisCos expected.

“The twin effects of the sudden increase in import duties of 35 per cent on meter and NERC’s wrong pricing frustrated the good intentions of MAP.

“The recent capping of estimated billing has also reduced the incentives for consumers to obtain meters under the MAP regulation.

“Paradoxically, in their Performance Improvement Plans (PIPs), all DisCos are committed to meter 100 per cent of the end users before 2024 through the MAP regulation, reflecting the regulator’s determination that DisCos should hands-off actual metering,” he said.

The AEDC boss said that the DisCos were also recommending that the government should grant full waivers on the 35 per cent increased duty surcharged on meters, until mass metering was achieved.

He stated that the DisCos were also recommending that an appropriate and commercial price on meters should be put in place by NERC, to achieve mass metering.

“Given NERC’s previous approval period of three years under the MAP regulation, DisCos propose capping to be introduced after massive metering roll-out over next 18 months.

“NERC should work with DisCos to improve the methodology on estimated billing.

“The DisCos proposed methodology on estimated billing should be adopted during the emergency meter roll-out period,” Mupwaya noted. (NAN)