23 January 2018

Nigeria: NERC Rolls Out Fresh Conditions for Third-Party Meter Investment in DISCOs

Abuja — A new draft regulation on third-party investments in meter infrastructure within the 11 electricity distribution networks in Nigeria by the Nigerian Electricity Regulatory Commission (NERC) stipulated that every investments to be made in the meter subsector must accommodate up to 40 per cent of local content contribution in the investment.

The regulation also said successful Meter Assets Providers (MAP) in any of the distribution networks would be given operational licenses that would last for 15 years by the regulator.

NERC released the draft regulation recently in Abuja. It explained amongst other provisions in it that its main objective was to provide standard rules in the creation of a third-party meter industry that could encourage the development of independent and competitive meter services in the power sector, eliminate estimated billing practices by the Discos, attract private investment into a viable metering services industry, close the metering gap through accelerated meter roll out, and enhance revenue assurance for the power market.

It noted that while the Discos are still responsible for meeting their metering targets as stipulated by the NERC from time to time, they would however be allowed to procure the services of MAPs in accordance with the regulations to enable it meet its metering targets.

According to the regulation, the minimum technology and back-office requirements expected of the MAPs to be engaged by the Discos must be sufficient enough with relevant technological resources that are capable of maintaining and retrieving records of financial, inventory, and customer data.

It noted that they must also be able to deploy infrastructure on an on-line real-time basis that would be sufficient for regulatory and statutory reviews.

"The technology-type deployed by the MAP shall be capable of being integrated to the distribution licensee's vending platform. Evidence of applicable certifications shall be required," said the regulation.

According to it, the distribution licensee shall conclude the procurement process for the engagement of a MAP within 120 calendar days from the day the regulation become effective.

"The commission shall engage the services of a tender auditor to audit the conduct and results of a distribution licensee's procurement process for the engagement of the MAP. Upon completion of evaluation of bids, the successful bidder shall submit an application for the grant of a Meter Asset Provider license to the commission.

"The commission shall grant a license to the successful bidder subject to satisfactory compliance with the minimum qualification criteria and procurement processes provided in these regulations. The tenure of MAP license shall be 15 years in the first instance," the NERC regulation added.

It stated that upon the completion of the approval procurement process and a grant of MAP license, the distribution licensee would be allowed to enter into meter service agreement with the successful bidder, adding that, "The MAP shall source not less than 40 per cent of its contracted metering targets from local meter manufacturing/assembling companies in Nigeria."

The regulation equally listed the obligations expected of the Discos, MAP and consumers in this regard.


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