15 January 2013

Nigeria: 18-Month Metering Plan - NERC to Punish Defaulting Discos

The Nigerian Electricity Regulatory Commission (NERC) has said it will adopt a very harsh measure to stem the abuse of its recently introduced estimated billing methodology by various successor distribution companies of the Power Holding Company of Nigeria (PHCN).

The proposed strict measure is expected to help the commission enforce its plan to ensure comprehensive metering of eligible electricity consumers in Nigeria within record 18-months and also guarantee that provisions and objectives in the cost-reflective Multi Year Tariff Order (MYTO-2) are honestly implemented to drive investments in Nigeria.

A presidential source who spoke to THISDAY in Abuja disclosed that the proposed cap on total kilowatts chargeable to unmetered electricity consumers by PHCN distribution companies had become necessary following indications of apparent disregard to the 18-months metering plan which NERC handed down to distribution companies in 2012.

The source explained that the commission had realised from its assessment of activities of the distribution companies that the companies still heavily rely on the estimated billing mechanism to charge customers of electricity consumed without consideration to providing metering facilities to the customers.

NERC had in 2012 rolled out a standardised and unified estimated electricity billing method which would serve in the collection of electricity revenue in NESI pending the total and comprehensive metering of electricity consumers across the country.

It in this regard, it had initiated a comprehensive consultation with stakeholders and electricity consumers preparatory to the adoption of the unified estimated billing system that also binds all PHCN successor distribution companies in MYTO-2.

Also a panel of enquiry it instituted in 2011 had in the course of its assignment discovered widespread corrupt practices in the distribution of metering facilities by PHCN within a Federal Government special intervention scheme.

The source said: "The commission has assessed the progress of the estimated 18-months metering plan which it agreed with distribution companies but realised that they are not doing anything tangible to ensure that customers without metering facilities are brought under accurate metering mechanism.

"They have instead relied on the estimated billing mechanism to charge customers for energy consumed and so we are proposing that within a very short period from now, there will be a cap on the amount of kilowatts of energy chargeable to customers without meters. It will be such that no distribution company will charge any customer anything more than 200 kilowatts of power consumed; what this means is that a customer that does not have meter will not pay for more than 200 kilowatts per month."

He further noted that if the customer accumulated up to 300 kilowatts, such customer would only be liable to pay for 200 kilowatts and nothing more as long the distribution company had refused to provide meter to such and it is now up to the disco to make up for the loss.

"We cannot run this sector this way, we cannot operate in such uncertainty and so discos would have to provide customers with meters or loss revenue," declared the source.

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