Electricity consumers’ apathy to prepaid meters, amidst collection losses

There is no gain saying that metering in the Nigerian Electricity Supply Industry (NESI) is a crucial part of power supply as it helps the 11 Distribution Companies (DisCos) quantify the electricity usage of consumers. ADETOLA BADEMOSI writes on customers’ apathy to meters and collection losses.

The use of estimated billings by DisCos as a means to determine the value of power used by consumers has continued to generate controversies.

In 2013, upon privatisation of the sector through the Electric Power Sector Reform, EPSR Act of 2005, the DisCos were to meter customers and reduce Aggregate Technical Commercial and Collection (ATC&C) losses within their first five years.

The DisCos in the agreement signed with the Bureau of Public Enterprises, (BPE) as of the time, were given a metering obligation of 1,700,000 meters over the first five years of privatisation.

In addition to this, the Regulator, NERC, had come up with provisions for CAPEX in MYTO 2015 Order and the Credit Advance Payment for Metering Initiative,( CAPMI).

CAPMI initiative, which was implemented by NERC prior to the commencement of privatisation and continued after privatisation, sought to provide an interim, but effective avenue to close the metering gap.

It allowed customers to pay upfront for their meters, but refunded within two years.

This was however suspended and replaced with the Meter Asset Providers (MAPs) provision in April 2018 and the National Mass Metering Programme (NMMP) which are being run concurrently.

But, as electricity customers’ enumeration persists, the metering gap continues to widen, thus paving way for estimated and crazy billings.

In the midst of this, the DisCos had blamed their inability to cover the metering gap over the years on insufficient Capital Expenditure (CAPEX) and non-cost reflective tariff.

The Director, Research and Advocacy, Mr Sunday Oduntan had during one of his interactions with newsmen noted that the current cost of tariff cannot accommodate the funding required for closing the gap.

“In simple terms, the cost of comprehensive metering, currently, simply dwarfs the ability of the current tariff to accommodate the same. It means that the already artificially suppressed tariff cannot accommodate the cost without an increase,” he had said.

Customers’ apathy towards prepaid meters-findings

Despite various efforts to phase out the era of estimated and crazy billings by DisCos, independent findings conducted within the Federal Capital Territory (FCT) have shown that while some customers are willing to pay for the not readily available meters, others are busy rejecting them.

This is not far-fetched from wide beliefs that meters provided by DisCos are mostly doctored to consume energy faster, thus increasing revenue for them.

As a result, they had preferred the conventional estimated billings which have continued to generate controversies and widened revenue collection gaps.

“In my house, I use an electric jug and especially a cooker. That cooker really helped me during that time when gas price was soaring. But with that meter I would not be able to use it (cooker),” says Mrs Judith Ekpeyong.

“I don’t wish to have it because it doesn’t pay me in the end and you even know what they say is that those meters are fraud because they used to consume units very fast.”

Busayo Alabi, a male technician in his early forties, queried why he should buy a meter which automatically puts a limit to his daily energy consumption.

On his part, he would rather stick to the normal estimated billing system than opt for the option.

“You see, I prefer electricity without that meter because I can use anything I want to use. For instance, when I get home now, the first thing I do if there is light is to power my A/C, fridge and all and I can leave it running for as long as I want. But that meter, if you load N1,000 for instance before you know it’s finished.”

Asked if he had ever used a prepaid meter? He answered in the negative but cited instances of acquaintances and neighbors who do.

To corroborate this, a highly placed source at the NERC affirmed the massive rejection of meters by consumers especially at the phase zero of the NMMP.

The source, who pleaded anonymity as he was not authorised to speak on the issue, likened the development to the difference in behavioral patterns of metered and unmetered customers.

According to the source, customers’ apathy is borne out of realisation that once installed; it puts a check on the use of certain electrical appliances that consume large amount of energy such as electric cooker, heater among others.

“If you don’t have a meter in your house, everything in that house works. The day we install a prepaid meter everything changes. First of all your electric cooker stops working, your air conditioner will not be cooling your house while you’re  still in the office or you call your son or daughter to switch it on while you’re on your way home. Then you realize N10,000 worth unit is finished within two days

“You know what has happened in the MAPs/ NMMP? Massive rejection of meters/ and you know what we did in our regulation? If you reject the meter, you get disconnected immediately. Metering is the powerline of this sector. Anything you do, if you don’t pay returns it will park up.

“We discovered massive rejection of what some customers are clamoring for because they discovered that they are not paying for the value of power consumed.

“In some parts of the North, they call them (meters) bariwa (antelope). They will tell you they don’t want.

“So if you want to use electricity, you have to pay for it.”

However, he stated that for customers who reject meters, the MAPs regulation stipulated that such people should either be disconnected or denied supply.

“So we have put it in the regulation that anyone that rejects the meter should be disconnected immediately or not given supply. So that is the reality of what is happening,” the source added.

On his part, Kunle Olubiyo, President, Nigeria Consumer Protection Network stressed the need for the Nigerian Electricity Management Services Agency (NEMSA) to ensure proper assessment of meters.

“There is need to ensure that there is no compromise in the meters. Very recently, in the last one week in Port Harcourt customers have been complaining that if they load N1000, the unit they get and the rate at which it runs out without a change in consumption is worrying,” he said.

Eight million electricity customers yet unmetered

Latest figures, however, have shown that over eight million registered electricity customers are yet to be metered.

According to documents obtained from the Nigerian Electricity Regulatory Commission (NERC), breakdown showed that out of 12,784,685 registered customers, only 4,772,90 have so far been metered.

The data revealed that the number of registered customers grew from 10,374,579 in 2019 to 12,784,685 which implies that the sector experienced a 19 percent increase in number of customers.

However, so far, only about 37.33 per cent of the totally enumerated customers have been metered leaving a gap of 62.67per cent.

This is coming about three years after the MAPS regulations became effective and over a year after the NMMP was initiated.

The Meter Asset Provider (MAP) Regulation (Regulation No: NERC/R/112), which became effective on April 3, 2018, introduced meter asset providers as a new set of service providers in Nigeria Electricity Supply Industry.

As assets with a technically useful life of 10 to15 years, the regulation provides for the third-party financing of meters, under a Permit issued by the Commission, and amortisation over a period of 10 years.

The electricity distribution companies, in line with their licensing terms and conditions, were obliged to achieve their metering targets as set by the Commission under the new regulation.

On the other hand, the FG launched the NMMP in respect of which the CBN, on October 2020 issued the Framework for Financing of the Programme (“CBN Framework”).

The Framework sought to, amongst others, increase the country’s metering rate and eliminate arbitrary estimated billing.

By the said Framework, the CBN will be providing financing support to the DisCos (for the procurement of meters for customers) and the local meter manufacturers.

However, these have since been replaced by the new Nigerian Electricity Regulatory Commission (NERC) Meter Asset Provider and National Mass Metering Regulation, (Regulation) 2021 an hybrid framework that merges the Meter Asset Providers (MAP) Regulation, 2018 and the National Mass Metering Policy (NMMP).

The aim is to ensure the closing of the metering gap through an accelerated roll-out of meters; to eliminate the prevalent practice of estimated billing in the NESI, to attract private investment in the provision of meters/ metering services in NESI, and to enhance revenue assurances at the retail end of the NESI.

NESI records N1.3trn market shortfall in two years

As a result of Aggregate Technical, Commecial and Collection (“ATC&C”) Losses, the industry recorded over N1.3 trillion market shortfall between 2019 and 2021.

According to the key and financial operations data in NESI, the market shortfall in the industry rose from N476.8 billion in 2019 to N521.6 billion in 2020, while N326.11 billion was recorded in 2021.

Out of a total market invoice of N2.4 trillion given to the 11 DisCos within the period, only about N1.1 trillion was remitted

Further breakdown shows that between 2019 and 2021 Jos, Yola and Kaduna DisCos performed lowest in their market remittances.

For instance, out of a total of N88.5 billion invoice given to Yola DisCo within the period, it only remitted an estimated N15.7 billion.

Meanwhile, data shows that out of a total 453,732 registered electricity customers under Yola DisCo, only about 72,727 that is 16 per cent  has been metered leaving a gap of 84 per cent.

No doubt, the increase in percentage of unmetered customers has continued to contribute to the rise in collection losses but customers’ negative dispositions towards meters may be a setback, hence the need for campaigns on the importance of energy saving.