The Nigerian Electricity Regulatory Commission (NERC), in collaboration with the Federal Government (FG), has given its approval for a substantial metering Capital Expenditure (CAPEX) of ₦344 billion to be allocated to Electricity Distribution Companies (DisCos). In an effort to address the metering gap over a period of five years. According to industry data, approximately 7 million out of the 12.6 million registered electricity customers currently face a metering gap. In order to address this issue, each of the DisCos will receive an annual approval of ₦6.25 billion for the deployment of 65,000 end-use meters within the timeframe of 2023 to 2027.
According to the 2024 Multi-Year Tariff Order, this move aims to gradually eliminate the reliance on estimated billing methods in its network. The Order not only includes the DisCos’ metering strategy but also sets up the Meter Acquisition Fund (MAF) to finance the distribution of customer meters. According to the statement, the management of the MAF will be centralised, and it will serve as a means of securitisation for long-term funding. Its purpose is to expedite the timely resolution of the existing metering deficit in the NESI.
NERC’s initiatives for metering improvement and collection efficiency.
Also, the Commission has mentioned the possibility of re-evaluating the MAF contribution amount in its regular reviews to account for changes in the administration of the MAF and other macroeconomic factors. In its quarterly reports, the Nigerian Electricity Regulatory Commission (NERC) linked the decrease in DisCos’ collection efficiency to the decline in electricity metering for consumers. As a result, DisCos are actively pursuing collection campaigns to enhance payment compliance from post-paid customers. The NESI’s financial sustainability is compromised due to the inefficiency of its collection processes.
In addition, it has expressed its intention to improve its surveillance of metering initiatives, including the National Mass Metering Program (NMMP) financed by the Central Bank of Nigeria and the Meter Asset Provider (MAP) scheme implemented by DisCos. This highlights the importance of increasing efforts to narrow the gap in metering availability. According to NERC, DisCos’ refusal to consider enhancing the optimisation of their energy delivery in alignment with the Service Based Tariff (SBT) regime may have detrimental effects on collections despite the inevitable necessity of tariff review.
MAP and NMMP ensure the delivery of meters to the consumers.
Furthermore, the FG has taken numerous steps to address the issue of inadequate metering, including the introduction of the Meter Asset Provider (MAP) and the National Mass Metering Programme (NMMP). The NMMP, funded by the CBN, allows customers to receive meters for free while providing loans to electricity distribution companies (DisCos). However, the MAP scheme, which received authorisation in 2018, is available to customers who opt not to endure the wait for meters through the NMMP.
Meters are a vital tool for power providers and customers alike, offering instantaneous updates on energy usage. The accuracy of electric meters is of utmost importance to ensure energy efficiency. These devices are responsible for gauging the electricity consumed by households or businesses, and any imprecision in their readings can result in higher bills than required. In order to guarantee precise measurement of electricity consumption in a residence, it is crucial to examine the compliance of the current meter with regulations established by governmental organisations such as the National Electrical Manufacturers Association (NEMA).
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By utilising prepaid electricity meters, individuals can effectively manage their energy consumption and financial planning. These meters enable users to constantly monitor their usage and solely pay for the amount they utilise, leading to substantial savings specifically for low-income families and small enterprises. Moreover, it eradicates the requirement for estimated billing, a practice that often results in excessive charges and disagreements between consumers and providers. It guarantees fairness and accuracy in billing by allowing users to exclusively pay for the exact amount of electricity consumed.