35 per cent import duty on metre components threaten roll-out ― NERC

The Nigerian Electricity Regulatory Commission (NERC) has said that the 35 per cent import duty increase on metre components, is threatening the roll-out plan of the Metre Asset Providers(MAP).

It said this partly contributed to the low meter roll-out recorded in the 2019 fourth quarter.

The Commission in its quarterly report said as, at December 2019, the electricity Distribution Companies (DisCos) had registered 10,374,579 customers out of which only 3,918,322 were metered.

It revealed that during the period, Abuja and Benin metered over 50 per cent of their registered customers.

The figure showed that with a total of 1,228,288 and1,022,458 registered customers, both DisCos metered 643,445 and 549,211 respectively.

It attributed the increase in meter roll-out carried out under the MAP scheme to;” the on-going enumeration exercise by DisCos through which unregistered electricity customers were brought onto the billing platform of the DisCos.”

However, the report indicated a significant fall in the number of meters installed under the Meter Asset Provider (MAP) scheme in Q4 compared to Q3.

For instance, in the 2019 third quarter, 883,768 end-use customers’ meters were installed but in Q4 only 22,825 were recorded.

The Regulator said: “Although some MAPs have not fully commenced metre deployments, the low metering recorded during the quarter was partly due to the increase of 35 per cent in import duty on meter components.”

It said the figures indicated that the target to close the metering gap in the Nigerian Electricity Supply Industry (NESI) by December 31, 2021, may not be met if impediments to the goal are not addressed.

“The Commission notes with concern that the additional 22,825 end-use customers’ meters installed during the fourth quarter fell significantly from the 83,768 meters installed during the third quarter. This poses risk to the Commission’s goal of closing the metering gap in NESI by December 31, 2021,” it said.

It added that: “The Commission is already working with the Ministry of Finance, Budget and National Planning towards addressing these issues in order to fast-track meters roll-out.”

Meanwhile, the Commission has issued seven DisCos with a notice of sanction for floating the Order 197/2020 on capping of unmetered R2 and C1 electricity customers.

The Discos are Benin, Enugu, Eko, Ikeja,Kano, Kaduna and Port Harcourt.

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“The Discos have 14 days beginning from June 4, 2020, to explain why the Commission should not sanction them over their alleged non-compliance,” it said

NERC had on February 2020, issued an Order titled: “Order on the Capping of Estimated Bill’s in the Nigerian Electricity Supply Industry (NESI)”, which repeals the Methodology for Estimated Billing) Regulations 2012.

The Order jointly signed by the Commission’s Chairman, Prof James Momoh and Commissioner legal, licensing and enforcement, Mr Dafe Akpeneye, had directed DisCos to ensure that all customers on tariff class A1 within their franchise areas are enumerated and metered by 30 April 2020, while all unmetered R2 and C 1 customers will not be invoiced for the consumption of energy beyond the cap stipulated in Schedule 1 of the Order.

“A customer of XYZ DisCo resident in White Acre under R2 (single-phase) tariff class has an energy cap of 78kWhr per month and a tariff of NGN24kW/hr. The maximum that XYZ DisCo can invoice such a customer is 78kWhr x NGN24kW/hr – NGNl,872.00 per month.

“Customers are to note that energy consumed for the purpose of estimated billing is capped during the transitional period till they are metered but the actual amount payable shall vary in the event of any approved tariff reviews affecting their customer class.”

It further stressed that: All R 1 customers, who by definition consume no more than 50kWhr of energy per month, shall continue to be billed at NGN4/kWhr and a maximum of NGN200 per month unless amended by an Order of the Commission.

That: “The energy cap prescribed by the Commission shall only apply to R2 and C 1 customers. All other customers on higher tariff classes must be metered by DisCos no later than 30 April 2020, failing which these customers are not liable to pay any estimated bill issued by the DisCo.”

The Commission simply described the Residential(R) customers as those who use the grid-connected premises exclusively for residential purposes. They are however sub-categorised into R1to R4 while the Commercial(C) customer class use the connected premises for any purpose other than exclusively as a residence or as a factory for manufacturing goods.

The regulator had explained that unrealistic estimated bills have adversely impacted on the market revenues, as a consequence of customer apathy and declining willingness to settle their invoices in full.

As a result, the Commission capped collection of electricity invoice from unmetered customers saying: “The Estimated Billing Methodology Regulation is hereby repealed and shall cease to have effect as a basis for computing the consumption of unmetered customers in NESI.”


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