The Nigerian Electricity Regulatory Commission (NERC) has opted to bring the Credited Advance Payment for Metering Implementation (CAPMI) which allows electricity consumer self-finance their meter acquisition and installation to a closure. Chineme Okafor takes a look at the scheme’s overall execution and why the NERC wants it closed
On Tuesday, the Nigerian Electricity Regulatory Commission (NERC) disclosed to THISDAY that it had written to the 11 electricity distribution companies (Discos) in Nigeria, to formally wind down the alternative meter financing scheme it initiated in 2013, by November 1, 2016.
Dubbed the Credited Advance Payment for Metering Implementation (CAPMI), the scheme which allows electricity consumer to self-finance their electricity meter acquisition and installation given that the Discos have been unable to promptly deploy meters to their homes and offices, would now seize to exist from November 1.
From November 2013 when the scheme was initiated, to June 2016 when it was evaluated, the regulator said only about 500,000 meters were deployed by the 11 Discos within their networks, with less than 35 per cent of that directly done by the Discos.
This by implication meant that electricity consumers may have paid to the Discos for their meters but largely didn’t get them installed. A development the regulator frowned at during its audit of the scheme.
Why CAPMI will be Closed
NERC’s acting chairman, Dr. Anthony Akah told THISDAY in Abuja that the directive to the Discos to close down the CAPMI scheme was based on the pronouncement of the Minister of Power, Works and Housing, Mr. Babatunde Fashola, that the Discos had done very badly with meter deployment even after collecting monies from consumers.
Akah stated that the Discos were saddled with the job of providing meters to their customers, and that CAPMI was a stop-gap measure to improve their metering capacity.
“It should be recalled that the CAPMI initiative, which was instituted in 2013 was designed to assist the Discos in providing alternative financing options for reducing the very dire metering gap that was estimated to be above 50 per cent (courtesy report submitted by the a metering committee headed by Late Barr. Bamidele Aturu) in 2012.
“The commission then invited stakeholders including all the Discos, meter service providers, local meter manufacturers and other importers of metering instruments to assist in articulating a scheme that would assist in reducing the suffering of customers from estimated billing.
“The Credited Advance Payment for Metering Implementation was then articulated to incorporate a framework for easy procurement by Discos based on a bid document that reduced the time lag and focused mainly on ability to supply and install the meters within 45 days from when a customer paid the stipulated fee,” he said.
He explained that while the scheme will be formally closed by November 1, the commission expects that Discos would meter all the customers who ha so far paid for meters under the CAPMI scheme and not collect any form of payments for meters between now and when the programme will end.
He further said on the decision to close down CAPMI: “A number of audits carried out by the commission revealed that most electricity customers were not being metered even after making payments beyond the agreed 45 days.
“Some Discos were merely selling meters to their customers in the disguise of implementing the CAPMI. Some Discos were reprimanded for their non-compliance to the CAPMI order, yet there was minimal improvement in meter deployment.”
NERC’s Investigations on CAPMI, metering
NERC had earlier in the year set up an investigative taskforce to keenly look into claims by the Discos that they installed sizeable amount of electricity meters for their customers since they took over operations in November 2013.
Then, the regulator said that if it discovered that the Discos manipulated data submitted to it on meter installation, it would be treated as criminal acts.
Akah also presented a metering status of the sector, saying that out of the 6,159,775 electricity customers accounts in the sector, barely 52 per cent metering level has been achieved, of which 3,206,599 were metered customers, and over 47 per cent or 2,953,176 are unmetered.
He said the Discos as at March 2016, collectively metered 403,255 customers from when they took over operations on November 1, 2013, and that 38 per cent of this figure or 151,724 were actually financed by the Discos, while the balance of over 60 per cent or 251, 531 were financed by the customers through the CAPMI.
The regulator said it would still hold Discos responsible for metering their consumers, and that it remained their duty to ensure that it happens.
Metering, an Exclusive Responsibility of Discos
Akah stated that the Discos would have to take up their responsibilities and provide meters to their customers irrespective of the closure of CAPMI. He explained that the task was part of the performance level agreement they signed with the country through the Bureau of Public Enterprises (BPE) during the privatisation process.
“Given the fact that metering is the exclusive responsibility of Discos, the commission issued a number of directives and instituted various compliance and enforcement groups to persuade Discos to improve the meter roll out from both their performance agreement and CAPMI.
“Some Discos neglected their primary obligation to provide electricity meters to their customers at no extra cost to them since it is part of the tariff being paid, but relied only on CAPMI. All these efforts proved ineffective in improving meter deployment.
“Between November 2013 and June 2016 only about 500,000 meters were deployed by the 11 Discos with Discos directly adding less than 35 per cent into the network. This is far below expected metering target,” he stated.
According to him: “This led to the pronouncement by the Minister of Power that given the suboptimal performance of Discos in deploying meters even after collecting funds from customers, that the CAPMI scheme should be reviewed and eventually wound down.
“It is in this regards therefore that the commission issued the directive that the CAPMI Programme should wind down in an orderly manner and cease to exist as from the 1st of November 2016.”