… as NERC allocates N4.36bn to Ikeja Electric, N2.99bn to Abuja DisCo, N2.92bn to EKEDC
Oredola Adeola
The Nigerian Electricity Regulatory Commission (NERC) has approved the use of N21,864,851,725.00 from the Meter Acquisition Fund (MAF) for the eleven electricity distribution companies (DisCos) to procure and install prepaid meters at no cost to unmetered Band A customers, who receive a minimum of 20 hours of electricity per day.
The Order, No: NERC/2024/072, dated June 19, 2024, was signed by NERC Chairman Sanusi Garba and Dafe Akpeneye, Commissioner (Legal, Licensing & Compliance) and obtained by Advisors Reports on Saturday.
NERC in the Order instructed the 11 DisCos to provide prepaid meters, following the disbursement of MAF, to unmetered Band A customers within their franchise areas.
Meanwhile, a breakdown of the N21,000,000,000 disbursement showed that Ikeja Electric received the highest allocation of NGN4,358,122,421, followed by Abuja DisCo and Eko DisCo with NGN2,990,745,647 and NGN2,921,896,285, respectively.
Other allocations include Ibadan DisCo (NGN2,516,469,752), Enugu DisCo (NGN1,726,893,467), Benin DisCo (NGN1,571,276,806), Kano DisCo (NGN1,568,029,563), Port Harcourt (NGN1,360,944,608), Kaduna DisCo (NGN1,220,367,039), Jos DisCo (NGN521,905,774), and Yola DisCo (NGN243,348,639).
The Commission in the Order stated that the amount is apportioned pro rata to contributions made by the DisCos.
The NERC emphasized that the meters to be procured and installed under the MAF framework will be provided at no cost to the Band A customers.
The Commission noted that despite previous initiatives like the Meter Asset Provider and National Mass Metering Regulations of 2021, metering challenges in the Nigerian Electricity Supply Industry (NESI) persist, with a national metering gap exceeding seven million customers.
It also identified the inability of the 11 DisCos to secure financing for meter acquisition and other capital investments as a major constraint.
To address this, NERC emphasised that it developed and approved the MAF scheme, designed to enhance DisCo creditworthiness by creating a credible revenue stream from market funds, thereby enabling long-term financing.
The N21,864,851,725.00 MAF, according to the Commission, was managed by a Fund Manager (FM) under terms negotiated by the DisCos and approved by the Commission.
It also established that the fund would support the Presidential Metering Initiative’s goal of closing the NESI’s metering gap within three years using smart metering technologies for data analytics.
NERC stated that the MAF will also serve as one of the revenue streams for repaying long-tenor financing for metering.
The NERC Chairman in the order stated that deploying funds under the MAF scheme will accelerate meter deployment, reduce commercial and collection losses, enhance service quality, and improve customer satisfaction.
He said, “The Federal Government and DisCos must expedite closing the metering gap for Band A customers to protect revenue and facilitate demand-side management.”
NERC Chairman also ordered the DisCos to conduct a transparent and competitive procurement process within 14 days from the order’s effective date to determine meter prices and select Meter Asset Providers (MAPs) or Local Meter Manufacturing and Assembly (LMMA) companies.
The DisCos are also required to submit a report detailing the procurement process to the Commission for approval within 20 days.
NERC said, “Upon Commission approval, DisCos will enter contracts with selected MAPs/LMMAs.
“Payments will be made based on milestones, either through an Advance Payment Guarantee or upon verified installation of contracted meter volumes.
” DisCos must ensure that all necessary resources and network clearances for meter installations are provided.
“The installation of contracted meters should be completed within 60 days from the process approval date, and all contracts must be filed with the Commission,” the Order stated.
Further checks by Advisors Report showed that as of April 2024, NERC’s factsheet indicated that 7,420,742 out of 13,410,795 electricity customers were unmetered.
Findings revealed that the MAF, funded by a NGN0.75/kWh deduction from DisCos’ revenues, aims to close this metering gap.
Although specific numbers of unmetered Band A customers to be deployed were not provided in the order, however Dr. Musiliu Oseni, NERC Vice Chairman during a meeting in April with Civil Society and Community-Based Organizations explained that approximately 15 to 20 percent of Band A customers remain unmetered, highlighting the initiative’s necessity.
