Use of estimated billing system in the supply of electricity in Nigeria has generated a lot of concern as consumers complain unceasingly about the exorbitant fees charged by Distribution Companies (“Discos”) for electricity usually not supplied.

The overzealous nature of estimated billing is now evident as consumers still get ‘crazy bills’ regardless of how economical they are with the use of power, worst of all is where the consumer has suffered series of short or long-term power outages, is on vacation or shuts down the power supply to the property and is rewarded yet again with an estimated bill. To resolve the consequences of estimated billing, the Nigerian Electricity Regulation Commission (NERC) introduced the Meter Asset Provider (MAP) regulation[1]  which came into force on 31st March, 2018 and became enforceable on 28th April, 2018. The regulation seeks to encourage independence and competition in metering services, attract private investments, close the metering gap and promote revenue enhancement within the Nigerian Electricity Supply Industry (NESI).

Nevertheless, the greatest achievement of the regulation will be to encourage investors to provide meters to electricity consumers so that consumers pay only for electricity utilised [2] and to bring confidence to the sector.

APPLICATION, REQUIREMENT, PROCUREMENT PROCESS AND GRANT OF PERMIT

Applicants are required to apply to the NERC for a certification of no objection to participate in the procurement process to be conducted by the Discos.  In order to promote transparency in the procurement process, the NERC intends to conduct a due diligence exercise upon receipt of applications and appoint a ‘tender auditor’ to audit the procurement process conducted by the Discos. On completion of the bids/procurement evaluation process and submission of permit applications, the NERC issues permits to successful MAPs which is valid for fifteen (15) years.

A cumbersome provision however is that each permit issued by NERC is usually for a single successful procurement process. Thus, MAPs would have to apply for other permits for various procurement processes. Since the objective of the regulation in the first instance is to attract investment into the sector, the multiplicity of permit applications may serve to discourage investors.

Furthermore, tender auditors must hold audits in a transparent manner to ensure a fair selection process and avoid the compromise of the tender auditors. A decision on a permit application is conveyed within 21 (twenty-one) days of submission of application. Given the bureaucracy prevalent in government agencies, it is the hope that applications are processed within the stipulated period.

Discos are required to complete the first phase of MAP engagement within 120 (one hundred and twenty) days from 2nd April, 2018 i.e. 3rd August, 2018 while the next phase is required to be completed within 120 (one hundred and twenty) days from the first phase of the engagement i.e 2nd November, 2018.

TECHNOLOGY REQUIREMENTS

MAPs are required to set up technology systems for record retrievals of financials and customer data as well as monitor the usage of deployed meters.  Their systems should also interface with the vending system/platform of Discos.

LOCAL CONTENT REQUIREMENT

A commendable provision of the regulation is the local content requirement which mandates that a minimum of 30% of metering volumes are acquired from local manufacturers.

RIGHTS AND OBLIGATIONS

Regulation specifies the rights and obligations of DISCOs, MAPs and Customers as follows:

  • Distribution Companies (DISCOs): It grants Discos the rights to
  1. Access meters installed,
  2. Data derived from meter reading for monitoring and billing purposes,
  3. Deal with issues on tampering with data in accordance with regulations,
  4. Include Metering Service Charge (MSC) alongside the energy charge,
  5. Have a meter deployment plan; and (vi) execute Metering Service Agreements (MSA) with MAPs.

Obligations: A notable obligation in terms of the payment structure is the requirement for Discos to forward the MSC which are to be ring fenced in a dedicated account to MAPs within a reasonable time. However, since the MSC is generated on the consumption of electricity, the Discos are liable to pay the MSC to the MAPs where there is a failure to provide electricity to customers for more than 2 (two) weeks. In so doing, it becomes the interest of the Discos to supply electricity to avoid additional costs. This would be a welcome check on Discos to ensure MAPs recoup their investment. However, in the event that failure to supply electricity is as a result of breakdown in faulty generation plants or transmission, who bears the responsibility? The regulation does not address this. It is necessary this is considered to protect the Discos from bearing the financial burden where the fault does not originate from within.

  • Meter Asset Providers MAPs: It confers the following rights such as rights to
  1. The meter asset until fully amortised i.e fully paid for by customer,
  2. Be paid the MSG
  3. Access to the customer’s premises for its operations; and
  4. Access to the vending platforms of the Discos.

Obligations: MAPs are obligated to ensure that meters conform to standard technological requirements and obtain all necessary certifications, carry out periodic inspection of the meters, replace faulty meters within 2 (two) working days of notification otherwise they forfeit payment of the MSC and liability to the Discos for loss of revenue in the event of prolonged delay. This is also a check on the MAPs to prevent interference of the revenue flow to the Discos.

  • Customers: The regulation confers the following rights on the customers
  1. Eligibility for meter installation
  2. Right to pay for the meter asset upfront which removes the responsibility to pay the MSC. The amount to be paid will be determined by the efficiency and installation cost of the meter
  3. Rights to replacement and repair of faulty meters at no additional cost within 2 (two) working days, unless the fault is caused by the customer. This will deter unauthorised tampering by customers.

Disputes about the party liable for damage is to be resolved in accordance with the regulations. The Customer shall be responsible for replacement through amortized payments where it has been established that damage was caused by customer. Where the customer’s meter is not replaced  within a billing period,  the average of  the last three (3) months bill will be used for to calculate the current billing period. Also, where a customer relocates to a new property or is on vacation for a long period of time, he can apply for a transfer or suspension of services respectively.

Obligations: The customer is obligated

  1. To grant access of the premises to the MAPs
  2. To ensure safety and prevent unauthorised access
  3. To pay for MSC through the Discos, where the customer fails to make payment, the amount shall be cumulated and deducted upon the next payment
  4. Not to move the meter as they are associated with feeders and distribution transformers.

DOCUMENTATION 

MAPs are required to enter into and execute a Metering Service Agreement (MSA) with Discos detailing the terms of their engagement and which must be filed with the NERC whilst a Service Level Agreement (SLA) which specifies standards for the Key Performance Indicators (KPIs) for performance measurement and scope on maintenance and revenue issues is also required to be executed with the Discos and filed with NERC.

CONCLUSION

As at 19th June, 2018 the NERC had certified it had no objections to the participation of 50 (fifty) applicants as MAPs.[3] This is a good development and shows the willingness of the regulator to commence implementation. It is however important for the NERC to closely monitor implementation of the regulation by the Discos. The Discos are currently faced with challenges such as financing obligations to lenders and the frantic need to recoup investments already made in the power sector and are likely to delay implementation of the regulation being that the estimated billing system is a swifter route to recoup their investments. Also, the Nigerian legislature is also attempting to put in measures to curb estimated billings as there is a bill to Criminalize Estimated Billing by Electricity Distribution Companies which has passed a second reading[4]. The MAPs are not left out as the NERC need to ensure the meter assets supplied are of good quality and not substandard products which is becoming commonplace going by the meters circulated in the past.[5] The NERC also needs to outline and enforce measures to ensure that consumer complaints are dealt with timely. Overall, the regulation shows an effort by the NERC to combat the scourge of estimated billings in Nigeria. It is envisaged that if proper implementation and monitoring is adhered to, the challenges of estimated billing will gradually diminish to improve the perception of government efforts to resolve the challenges in the Nigerian Power Sector.

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