The NESI’s Metering Conundrum

The sub-sectors in the Nigerian Electricity Supply Industry (NESI), generation, transmission and distribution, face peculiar challenges that impede adequate power supply to consumers and deepen the liquidity crisis. Among these challenges, the NESI’s metering conundrum is of great concern.

Since the 2013 privatisation of the sector, the electricity metering gap has done nothing but grow. For this reason, most electricity customers pay for tariffs according to their distribution companies’ estimated billing procedures (DisCos). However, the estimated billing procedures consistently lack transparency and room for accountability. And because customers cannot adequately prove that the amount they pay is equivalent to the electricity supply, it reduces their willingness to pay bills. Therefore, the DisCos’ collection rates decrease, and the liquidity crisis worsens.

However, post-privatisation, the Nigerian power sector has experienced the implementation of different metering schemes. In 2015, the Nigeria Electricity Regulatory Commission (NERC) introduced the Credited Advanced Payment for Metering Implementation (CAPMI) scheme. Although unsuccessful, CAPMI aimed to provide meters to customers willing to pay, while their DisCos refunded the cost in cash or equivalent energy units.

After the failure of CAPMI, NERC introduced the Meter Asset Provider (MAP) scheme in 2018. The MAP scheme sought to empower meter asset providers to finance, procure and install meters for electricity customers in the country. The cost of the meters was to be recovered through a Metering Service Charge billed to the customers as part of their tariffs. Unfortunately, this metering scheme has not been as successful as expected.

To further address the NESI’s metering conundrum, the federal government launched the first phase (Phase 0) of the National Mass Metering Programme (NMMP) on the 30^th of October 2020 with a loan from the Central Bank of Nigeria (CBN). The programme’s first phase aimed to disburse a million meters to electricity consumers; however, only about 980,000 meters were disbursed. Although the goal for the first phase wasn’t reached, the NMMP is already thought to be better than the MAP, which installed 350,000 meters in over eighteen months.

The NERC Commissioner for Finance and Management Services, Mr Nathan Shatti, recently announced that the second phase (Phase 1) of the NMMP would commence in August 2022. The Regulator further stated that 45 local meter manufacturers are bidding to be part of this second phase. Shatti said:

Our target is to install four million meters for customers. From our experience in phase zero, we want to make sure that the manufacturers can deliver before allocation is made.

However, due to allegations of fraud by the CBN against some Meter Asset Providers (MAPs), the second phase of the NMMP seems to have been put on hold. So far, the CBN has provided over ₦60 billion in intervention funds to address the NESI’s metering challenges. However, despite these interventions, the NESI’s metering conundrum remains a massive bottleneck.

In their latest Commercial KPIs Q4/2021 report, the Association of Nigerian Electricity Distributors (ANED) reported that of the 10 million electricity customers in the country, only 4.7 million are metered, which leaves 5.3 million unmetered registered customers.

At the end of 2021, over 10 million customers are registered, with approximately 47 per cent metered.

However, data obtained from NERC shows that there are 12.78 million registered electricity customers in the country. The NERC data also shows that the value for metered customers drops to 37.3 per cent, with unmetered customers being 62.7 per cent.

These disparities in data beg the importance of a system that adequately enumerates electricity customers and the progress of metering schemes as they move forward. Also, how can the CBN ensure that metering intervention funds are adequately utilised, and the NMMP does not fail? These critical questions must be overcome for any effort at addressing the NESI’s metering conundrum to be productive.