Alleged high-level corruption, weak regulation, and the inability of the National Assembly to criminalise arbitrary billing of electricity consumers may continue to widen the metering gap in the country, as distribution companies fail to metre 8.1 million electricity customers eight years after privatisation.
The Central Bank of Nigeria (CBN) appears to have been forced to withdraw the illegal freezing of 157 accounts belonging to about 10 metre-producing companies that allegedly played roles in short-changing Nigerians during the National Mass Metering Programme, which was introduced by the federal government, to douse tension over electricity bill increase, reports The Guardian.
While the Nigerian Electricity Regulatory Commission (NERC) disclosed that four million meters would be provided to consumers this year, the World Bank in a bid titled DREP-PPI, Credit No 9206-NG, and project identification number P172891, would provide a loan to kick-start the first phase of NMMP.
This is coming as the Meter Manufacturers and Assemblage Association of Nigeria (MMAAN), in a letter dated April 17, 2023, insisted that the plan by the World Bank would make it “impossible for local manufacturers to participate in the project, stressing that the move relates to extremely high average yearly turnover, cash flow, and security bid, all in US dollars.
The MMAAN in another letter dated March 24, 2023 asked the NERC to increase the price of prepaid meters from the current price per unit of a single-phase meter N58, 661.69 to N117, 323.38, while the current price per unit of a three-phase meter reviewed from the present price of N109, 684.36 to N219, 368.72 (excluding VAT).
The MMAAN equally wants existing contracts under the NMMP Phase One, coming through the CBN loan to be reviewed and re-awarded in the prices stated above.
In the Key Performance Indicators (KPIs) rooted in the Performance Agreement (PA) for the DisCos, the NERC, through the EPSRA Act of 2005, stated that power utility companies are charged with the responsibility of metering consumers. This is the basis for Section 32, Sub-section D, and Section 76, Sub-section 2 of the Act, which aims to calculate tariffs to achieve the legislation on liberalisation.
Indeed, when the question of who should provide metres resurfaced when NERC launched the Meter Asset Providers (MAPs) policy, the commission insisted that metering all electricity consumers remains the responsibility of DisCos even under the Meter Asset Provider (MAP) Regulations 2018.
Despite failing to meet up with the expected average deployment of 1, 640, 411 meters per annum, which would have bridged the gap in the last eight years, a fund meant for the government-funded NMMP scheme was allegedly misappropriated as metre suppliers, the DisCos and the powers that be in the sector reportedly forged figures amidst portfolio companies that could not deliver.
The CBN, last year, approached a Federal High Court in Lokoja, Kogi State for an order to freeze 157 accounts of Meter Asset Providers for allegedly diverting intervention funds under the NMMP between January 1, 2020, to March 15, 2022.
The court documents showed that the apex bank requested 15 commercial banks and the Bank of Industry (BOI) to freeze the accounts of 157 companies for 180 days pending the outcome of its investigations.
The companies identified by the CBN were Mojec Meter Asset Management Company Limited, Integrated Power Nigeria Limited, Holley Metering Limited, Protogy Global Services Limited, Turbo Energy Limited, G Unit Engineering Limited, Koby Global Engineering Services Limited, FLT Energy Systems Limited, Smart Meters Asset Provider Company Limited and Cresthill Engineering Limited.
It was learnt that while most heads of DisCos, especially those who have been ousted from the system are being trailed by the EFCC due to the metering saga, and other allegations, the Presidency’s team on infrastructure pulled the string that forced the CBN to abandon the allegations.
The Acting Director of Corporate Communications Department, CBN, Dr. Isa Abdulmumin, did not respond to inquiries by this paper over the development.
Introduced in October 2020, the federal government said that about 900, 000 free prepaid meters were installed under the first phase of the programme called Phase Zero. Phase One of the project has since remained a mirage as the CBN’s move reportedly resulted in rigorous investigation of the capacity of the meter providers.
A Professor of Energy Economics, Wunmi Iledare, is still shocked that in this age and time, metering has remained a challenge for DisCos.
“A metre is critical to properly recover the cost of electricity generation and distribution. It is also a way to know actual energy consumption per household. So, it is shocking that DisCos are lagging behind in metering their consumers,” Iledare said.
While the National Assembly may have abandoned a bill that attempted to criminalise estimated billing as the end of the Ninth National Assembly is only 16 days away, Iledare said a quick way to metre consumers is to declare estimated billing illegal.
A former Chairman of NERC, Sam Amadi, insisted that the energy theft and liquidity crisis in the sector would only be addressed if consumers are metered.
“We need to tackle energy theft through rigorous enforcement of laws. But you will not succeed much except most customers are metered, whether postpaid or prepaid. Metering will help a lot with loss reduction, while we work to improve the general efficiency of the sector,” he noted.
The Executive Director at Powerup Initiatives for Electricity Rights, Adetayo Adegbemle, faulted approaches adopted to close up the metering gap, adding that metering needs huge investment, both from the DisCos and the government.
According to him, local metre manufacturers with capacity should be funded so that the country can build a local metering ecosystem, be able to source most of the metering components locally, as well as be less dependent on foreign exchange
“The Meter Assets Providers Scheme should be revised so that customers can directly apply for metres from independent metering service providers. This will also enable us to have an independent source of data for the metering subsector,” Adegbemle said.
Adegbemle called for an immediate review of the NMMP to enable millions of Nigerians to get metres.
For electricity market analyst, Lanre Elatuyi, while distribution companies must meter all their customers, illiquidity and below-average capital expenditure have limited the deployment.
“The Federal Government has intervened severally in this issue, but none of the interventions has yielded a positive result because of the insincerity of the market players. The corruption in the industry and the involvement of key industry players are the reasons why the latest intervention by the FG, through CBN has failed.
“The NMMP was designed to make the needed funds for meter procurement available for the DisCos and meter asset providers, but what happened was collusion and diversion of the disbursed funds for private use. Everyone wants to make money and take advantage of the system at the expense of the consumers,” Elatuyi said.
He expressed fears that nothing may change until the electricity market attains retail competition when consumers could switch their suppliers at will.
Elatuyi maintained that the monopoly enjoyed by the DisCos, as well as regulatory laxity would keep Nigerians at the mercy of the utility companies while calling for a market survey to determine if the current price of a metre is reasonable.
He also added that the current demand would be too costly and out of reach for Nigerian consumers.
Metre manufacturers, on their part, based the justification for the 100 per cent price increase on the scarcity of foreign exchange at the CBN window, naira devaluation, additional speculation for meters, increase in the price of diesel by 158 per cent, general inflation hovering at about 22 per cent, as well as the projected increase in the price of Premium Motor Spirit when the new administration resumes office.
But for electricity consumer rights advocate and legal practitioner, Kunle Olubiyo, the involvement of successive governments in driving mass metering programme has turned out to be more flops than successes.
Olubiyo said: “Moving forward, the involvement of the government metering value chain should be restricted to providing an enabling business environment, fiscal and non-fiscal support, and others.”
He said that the government ought to be limited to policy making and regulatory enforcement, while customers should be allowed to buy customised made-in-Nigeria meters.
A Professor of Energy/Electricity Law, Yemi Oke, wants a new regulation to be introduced to enable metre manufacturers to build metres directly, adding that the DisCos should focus on electricity distribution.
Oke described estimated billing as fraudulent, noting that the current approach requires an urgent review that would target consumers’ liberation.
“We’ve been having a series of policies on metre and metering, which haven’t worked. So, I suggested that metre installation should be for metre manufacturers; they can assist the DisCos and others to calibrate in a way that would be suitable to them. They should manufacture different categories of metres for end users.
“The DisCos should be concerned about power distribution, while GenCos should be concerned about generation. Metre manufacturers and suppliers should be concerned with metering. That is another sub-sector entirely,” Oke said.