03, 2020 / 11:45 AM / by CSL Research / Header Image Credit: Nigeria Electricity Hub
A Punch news report says the Nigerian Electricity Regulatory Commission yesterday, ordered power distribution companies to start disconnecting electricity consumers who reject meters. The Federal Government recently commenced the mass deployment of about six million meters across the country in order to stop estimated billing and improve service delivery in the power sector.
However, while some consumers are opposed to being metered to avoid paying the exact sum for the electricity consumed, some discos in a separate report are charging consumers for meters against the directive of the Federal Government to distribute the meters free to consumers. In reaction to this, the Federal Government has warned that any of the Discos or their agents selling prepaid meters to their customers will face stiff sanctions. There is also a directive from the regulator to the discos that even for meters that have been paid for previously by consumenrs, there is need for the discos to find a way to reimburse those consumers over time.
Ineffective metering remains a major drawback to the success of power sector reforms in Nigeria. While some consumers avoid paying for power consumed through meter bypass, some other consumers are made to pay for what they haven't consumed through estimated billing by discos. Discos have been largely unsuccessful with metering their customers. As far as inadequate metering is concerned, Discos over time, have used this situation to their advantage via estimated billings. It appears that fully metering customers is currently being viewed as a disincentive, given that estimated bills can easily be manipulated.
According to a report by the Nigerian Electricity Regulatory Commission (NERC), out of the 10.4m registered electricity customers, only 3.9m had been metered as at the end of the fourth quarter of 2019. Clearly, this validates the widely held view that there are a wide number of customers on estimated billing which gives room for illegal connection to the networks and in turn corrupt practices. NERC further revealed that only three out 11 Electricity Distribution Companies in the country had metered more than 50% of electricity customers under their coverage areas as at June 2019.
Effective metering in our view, is one step ahead in solving the myriad of problems embattling the Nigerian power sector.Though previously supposed to be unpaid for, many end customers in a bid to avoid the bureaucracy associated with getting meters have paid to get their own meters. We believe the provision of meters to all end-use customers will go a long way in ameliorating the liquidity squeeze in the power sector whilst also providing cashflows to the Discos for investment in equipments needed to evacuate unused electricity to consumers nationwide. We laud the FG's efforts at distributing meters freely to end users but we note that without effective penalties for erring Discos and consumers, progress may still remain very slow.