Electricity Distribution firms are under pressure to provide prepaid meters. The Nigerian Electricity Regulatory Commission has given them one year to end the controversial ‘estimated billing’ system, writes Olisemeka Obeche
The electricity distribution companies (Discos) operating in various parts of Nigeria are currently under pressure to issue prepaid meters to millions of unmetered electricity customers as the one-year target for ending the controversial ‘estimated billing’ system ticks away.
The Nigerian Electricity Regulatory Commission (NERC) gave the 11 electricity distribution companies 12 months to bridge the huge metering gap in the power sector as part of the new Multi-Year Tariff Order which took-off on February 1, 2016.The power firms are mandated by the regulatory authority to finance meter distribution and recoup their capital expenditure through tariff.
A special investigative panel set up by NERC stated that more than 50 percent of electricity consumers across the country are currently without prepaid meters, with more than five million new meters expected to be installed to bridge the gap.
Mr. Sunday Oduntan, Executive Director, (Research and Advocacy) of the Association of National Electricity Distributors (ANED), disclosed that power distribution companies have embarked on metering programme, but admitted that it would take more than a year to bridge the metering gap.“We are embarking on aggressive metering. We have five million metering gap and the maximum a Disco can do today is 20,000 meters on average in a month. So, it is not going to happen overnight. Five million meters that were supposed to have been fixed in the last 32 years were not fixed, and people are still building new houses and the maximum we can do is 20,000,” he said.
The minister’s metering target
Minister of Power, Works and Housing Mr Babatunde Fashola had reportedly given the electricity distribution companies specific targets on the number of meters to be installed by the end of June and December 2016 respectively.
For instance, Ikeja Electricity Distribution Company was mandated to provide meter to about 120,000 customers by the end of the second quarter and add 220,000 before the end of the year to bring its grand total to 340,000, while Eko Electricity Distribution Company Plc has been mandated to issue about 140,000 less during the period.
The Managing Director and CEO of Eko Electricity Distribution Company, Mr. Oladele Amoda, said during the unveiling of some of meters at the Ijora Business District of EKEDC in Lagos, that their plan was to distribute 90,000 by the second quarter of this year, and make it up to 150,000 by the end of the year. “By the end of this year, we would have installed about 200,000 meters,” he said.
The Benin Electricity Distribution Company and the Ibadan Electricity Distribution Company (IBEDC) have also pledged to supply 200,000 and 300,000 meters respectively to their customers before the end of the year. Managing Director of Ibadan Electricity Distribution Company, Mr. John Donnachie said that the firm was ready to distribute over 300,000 every year from 2016 to 2024 with the aim of bridging the huge metering gap in its network.While urging electricity consumers to utilise the opportunity provided by Credited Advanced Payment for Metering Implementation scheme to bridge the huge metering gap, Donnachie disclosed that IBEDC had launched a 10-year metering plan estimated to cost N47.18billion.
Only 182,338 customers were metered at the time IBEDC took over in November 2013. Most of the meters had become obsolete or faulty and would need to be replaced to ensure quality service.
TheEconomy findings also show that Kano Electricity Distribution Company has been handed the tough task of issuing about 40,000 prepaid meters by the end of June and additional 100,000 by December 2016. Similarly, the Yola Electricity Distribution Company is expected to install 30,000 by the end of the second quarter and 75,000 by the end of the year, while its counterpart in Port Harcourt would provide customers with about 75,000 and 150,000 meters under the same time line.
Hurdles ahead
Although most electricity distribution companies have begun distribution of meters, there are doubts over the ability of the cash-starved firms to meet the target set by NERC. With an increase in power generation and transmission capacity that could guarantee steady electricity and increase revenue through tariff not expected any time soon, sources say the management of most Discos are not quite comfortable about investing too much in the meter project.
The Chief Executive Officer, BEDC, Mrs. Funke Osibodu, echoed their fears when she lamented that the company’s prepaid metering investment plan is constrained by limited resources. “We are directed to meter all our customers within one year, but we are constrained by the limit of capital expenditure that we can invest. We, at BEDC, cannot spend above N4billion per year as capital expenditure and if we invest above that, we won’t be able to recover our investment due to the present tariff structure,” Osibodu said.
The fear of the Discos is not misplaced. The NERC guideline stipulates that Discos would bear the cost of distribution of meters across the country and can only recoup their investment through tariff.
Although, the Central Bank of Nigeria (CBN) expressed its readiness to re-commence disbursement of the balance of the N213 billion power intervention loan facility previously approved but suspended, it has done very little to assuage frayed nerves.