N120b CBN metering intervention timely – Consumers: One of the myriad of challenges bedeviling the Nigerian Electricity Supply Industry (NESI) is metering. On its own, the Nigeria Electricity Regulatory Commission (NERC) in March 2021 directed the 11 Electricity Distribution Companies (DisCos) to replace obsolete and faulty meters.
According to Order No. NERC/246/2021, of March 4, seven million customers in the electricity market were un-metered. The commission that alluded to an enumeration that was carried out added that three million meters among the installed ones were faulty.
Metering has remained a source of dispute among the DisCos and their customers due to unbelievable estimated billings. On the other hand, its absence has remained a major source of commercial losses in the electricity market.
For instance, only last week, the World Bank and the Presidency were at each other’s throats owing to exactly what the metering gap in the market is.
Recently, there were reports that 55.5 per cent of the customers still lack meters.
This void and its attendant challenges, prompted the Federal Government to introduce the National Mass Metering Programme. With the programme, the Central Bank of Nigeria (CBN) has intervened to bridge the infrastructure deficit mostly in the distribution sub-sector of the NESI.
Read also: Lagos State unveils smart meter initiative to improve electricity supply
Already, the apex has disbursed N3.6 billion of the fund as metering intervention to the DisCos for metering.
On this note, President, Nigeria Consumer Protection Network, Barrister Kunle Olubiyo has said the 11 DisCos are helpless without the N120 billion Central Bank of Nigeria (CBN) metering intervention. He described the gesture as a welcome development.
Speaking with The Nation on phone, he said: “CBN intervention is DisCos is a welcome development because the DisCos as we speak now, if the consumers’ transformers break down, majority of the DisCos are helpless”.
According to him, they cannot provide the resources to procure equipment as new transformers neither can they refurbish the transformers.
He attributed the situation to the security challenge among the energy distributing firms.
He said: “They have not been able to effectively pull out funds to invest in procurement of new transformers, repair or replacement of transformers. If your community has any issue and writes to any of the DisCos, they will be helpless”.
Olubiyo noted that as necessary as the provision of meters is in the power sector, the DisCos have no investment to procure and install them for their customers. Consequently, the Federal Government decided to help them out through the Apex bank. In the arrangement, according to him, the DisCos are expected to provide obligors in order to access the fund that is in an escrow account in the CBN.
With this, the government can prevent the power firms from diverting the funds. He also explained that the Nigerian Electricity Regulatory Commission (NERC) has built the money into the Multi-year Tariff Order (MYTO) that was approved early this year.
His words: “That means somewhere along the line, they have liquidity challenge. Some of the staff are being paid in dollars. There is overbloated personnel. They have liquidity challenges. “They don’t have money to invest in the sector, and the issue of meters is germane. The Federal Government now decided to come in to provide the funding and their managements were asked to provide what is called an obligor. It is an undertaking, obligation, irreversible standing order.
“Each of the DisCos is expected, if they are given the money, they may divert them into frivolous things. The Central Bank of Nigeria now escrow the account. What it means is that all the money that comes first come to the account.
“The CBN will now remove the one that is going for the meter. They will remove the meter component. It is loan they have given them to procure meter. The tariff they approved this year has taken care of meters. They have built meter purchase into it”.
Thus, the move by the apex bank shall add up in no small ways to answer some of the perennial questions in public electricity supply in the country. With the intervention, according to some analyists in the power sector, the DisCos can now replace their obsolete equipment distribution infrastructures such as transformers, poles and conductors can be included in the CBN’s intervention basket.
Essentially, the funding will help to address the inappropriate billings by the DisCos that has remained a drawback in the NESI despite the privatization of the DisCos. This has caused financial leakages from the collections of the DisCos.
The NERC had in its second quarter 2020 report disclosed that the total billing to and collection from electricity consumers by all the eleven (11) DisCos stood at ₦164.07 billion and ₦121.61billion respectively”.
NERC also said during the quarter under review, the total revenue realised by the Commission was ₦2.23billion, about 31.35 per cent lower than the revenue realised in the preceding quarter. With a fully metered electricity market, the commercial losses are bound to reduce.
This post was last modified on May 6, 2021 10:10 AM