- By JACOB ONJEWU DICKSON
The recent electricity bills distributed to estimated customers across the country is not only wicked, but criminal.
This was done in flagrant disregard for the capping which the National Electricity Regulatory Commission (NERC) issued out in February this year.
In view of the aforesaid, the August and September billings are contrary to the NERC Order “C” of Page 7 of the ORDER NO/NERC 197/2020 titled Order on the Capping of Estimated Bills in the NESI.
The NERC had in February issued order No/NERC/197/2020 on capping of estimated billings in the Nigerian Electricity Supply Industry, thereby placing a cap on estimated bills to unmetered customers.
This was to protect unmetered R2 (Residential single and 3 phase meters, who consume more than 50kwh per month) and C1 (Commercial single and 3 phase meters, small businesses) customers from estimated and arbitrary billing and hopefully hasten the process of metering. (June 9, 2020) NERC Tweet
“NERC Nigeria @NERCNG The Nigerian Electricity Regulatory Commission has issued notices of intention to commence enforcement action against Seven electricity distribution companies over their failure to comply with the Order 197/2020 on capping of unmetered R2 and C1 electricity customers.
12:55 PM · Jun 9, 2020”
NERC further tweeted that some erring Distribution Companies (DisCos) were sanctioned for not adhering to the capping in June this year.
“NERC Nigeria @NERCNG The Discos are Benin, Enugu, Eko, Ikeja,Kano, Kaduna and Port Harcourt. @NERCNG @nannews_ng @NTANewsNow @AIT_Online @THISDAYLIVE @TheSun @LeadershipNGA @GuardianNigeria
12:55 PM · Jun 9, 2020,” the tweet said.
The power sector regulatory agency in its statement said, “The Nigerian Electricity Regulatory Commission has issued notices of intention to commence enforcement action against seven electricity distribution companies over their failure to comply with the order 197/2020 on capping of unmetered R2 and C1 electricity customers’’.
Prior to the capping, NERC had done a proposal to Cap Estimated Billing.
NERC proposed to issue an order stipulating the maximum amount that any unmetered customer will pay to the distribution company (DisCo) that provides him or her electricity services.
This amount will continue to apply until the customer is metered by the distribution company. NERC proposes to set this cap at a level that will protect unmetered customers and provide sufficient incentives for the DisCos to quickly meter such customers.
The context of this proposed new regulation is the realization that distribution companies are not doing enough to meter unmetered customers.
Since the takeover of the network by the preferred bidders on November 1, 2013, there has not been aggressive metering as promised by the preferred bidders.
This has led to overbilling of customers especially in the face of epikeptic supply of electricity.
The main reason for low rate of metering has been the inadequate financial liability of the sector. But this excuse is no longer viable as the NERC sought to solve this problem through the Credited Advanced Payment for Meter Implementation (CAPMI) which provides DisCos with the opportunity to finance metering through consumer finance.
In spite of this innovative financial crowd-sourcing initiative, minimal metering has occurred because DisCos have not been determined enough to meter their consumers
The Commission therefore needs to provide the incentive for speedy metering of unmetered customers by limiting the amount of revenue that a distribution company can earn from unmetered customers.
This transfers the cost of non-metering of customers from hapless customers to operators who have the responsibility and capability of metering customers.
Ahead of the capping, a Public Hearing On Proposal to Cap Estimated Billings and to Create an Independent System Operator was held.
The Nigerian Electricity Regulatory Commission (NERC), in furtherance of its mandate to ensure an efficient and fair electricity market that ensures an adequate, reliable and affordable supply of electricity to Nigerian homes and businesses invited operators, consumers, and the general public to the public consultation to consider for approval by the Commission, two proposals, namely,
(1) A proposal to cap the amount that a distribution company can charge an unmetered consumer until he or she is metered;
(2) A proposal to create an Independent System Operator (ISO) from the Transmission Company of Nigeria.
NERC proposed to issue an order stipulating the maximum amount that any unmetered customer will pay to the distribution company (DisCo) that provides him or her electricity services.
This amount will continue to apply until the customer is metered by the distribution company. NERC proposes to set this cap at a level that will protect unmetered customers and provide sufficient incentives for the DisCos to quickly meter such customers.
The Commission therefore, needed to provide the incentive for speedy metering of unmetered customers by limiting the amount of revenue that a distribution company can earn from unmetered customers.
This transfers the cost of non-metering of customers from hapless customers to operators who have the responsibility and capability of metering customers.
There was also a Proposal to Create an Independent System Operator (ISO).
The Electric Power Sector Reform Act mandates the NERC to create and maintain an efficient, transparent and fair electricity market that continuously allows customers access to adequate, reliable, safe and affordable electricity services.
As part of the features of such a market, the Act prescribes the establishment of an independent system operator (ISO) immediately after substantial privatization on such terms as NERC will indicate.
The NERC wishes to unbundle the Transmission Company of Nigeria (TCN) into a Transmission Service Provider (TSP) and an Independent System Operator (ISO).
The ISO is conceived to be jointly owned by the operators in the market and operate totally independent of government so as to be fully impartial and professional in the dispatch of energy.
An ISO is a global model that guarantees credibility and confidence in the electricity market such that investors in independent power projects (IPPs) will have no fear of discrimination in the use of transmission network.
The public consultation in view of the above was held at the Hearing Room, Nigerian Electricity Regulatory Commission, Plot 1099 Adamawa Plaza, First Avenue, Abuja on Tuesday, June 2, 2015.
In futherance to that, on February 20, 2020, the Nigerian Electricity Regulation Commission (NERC) released an Order on the capping of estimated bills in the Nigerian Electricity Supply Industry (NESI) (the Order).
The Order was enacted pursuant to the NERC’s powers to regulate the NESI, to create, promote, and preserve efficient industry and market structures and to ensure the optimal utilization of resources for the provision of electricity services in Nigeria. In this article, we revisit and discuss important highlights of the Order.
The Estimated Billing Methodology Regulation, 2012
The NERC’s (Methodology for Estimated Billing) Regulations 2012 (Estimated Billing Methodology Regulation) was introduced in 2012 to deter Distribution Companies (DisCos) from issuing to electricity customers arbitrary electricity bills which did not reflect their actual power consumption.
The Estimated Billing Methodology Regulation classified consumers who can be issued estimated bills into three (3) basic categories:
Customers with faulty meters. This category belongs to those customers which have been issued meters but which are no longer functional.
Customers whose meters cannot be read. This category belongs to those customers whose meters cannot be read by the officials of the applicable DisCo due to inaccessibility arising from locked doors, customers who are not on the premises at the time when the officials of the DisCo come to read the meter, the presence of dogs on the premises of the customer etc.
Existing customers without meters. This category belongs to customers who have not been issued meters by the DisCo and who are directly connected to the DisCos’ distribution network.
However, the Estimated Billing Methodology Regulation achieved little success due to inadequate level of metering and distribution transformers.
Over 65% of complaints lodged at the customer centres of DisCos together with the subsequent appeals to NERC are as a result of non-provision of meters and unrealistic billing of unmetered customers. To facilitate the metering of electricity consumers, the NERC introduced the Meter Asset Provider (MAP) Regulations in 2018 with the ambitious aim of metering all customers within 3 years.
The Meter Asset Provider (MAP) Regulations, 2018
The MAP Regulations introduced by the NERC in 2018, were issued principally to:
Encourage the development of independent and competitive meter services in the NESI;
Eliminate estimated billing practices in the NESI.
Attract private investment in the provision of metering services in the NESI.
Close the metering gap through accelerated meter roll out in the NESI.
Enhance revenue assurance in the NESI.
As at the end of the fourth quarter of 2019, the NERC had issued permits to twenty-six (26) Meter Asset Providers.
However, due to a number of factors, including changes in fiscal policy, limited availability of long-term funding and several other constraints, the MAPs and the MAP Regulations were able to achieve very limited success.
Metering thus, still remains a key challenge for the NESI with only two (2) DisCos having been able to meter more than 50% of their electricity customers as at the end of the fourth quarter of 2019 – Abuja and Benin DisCos.
Of the 10.3 million registered electricity customers in the NESI, only 37.77% had been metered with the remaining 62.37% remaining on estimated billing at the end of the fourth quarter of 2019.
Hence, it should be on note that the capping released by NERC in February 2020 stops DisCos from billing estimated customers more than 60 kilowatts monthly, which most of them are abusing, riding on the ignorance of electricity consumers.
ONJEWU DICKSON is a Kaduna based journalist
