Report: Ineffective Metering Major Drawback to Power Sector Reform

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Obinna Chima

Ineffective metering remains a major problem to the success of power sector reforms in Nigeria, a report has stated.

The report by Lagos-based CSL Stockbrokers Limited, noted that some consumers avoid paying for power consumed through meter bypass, while others are made to pay for what they haven’t consumed through estimated billing by the distribution companies (discos).

The report cited a new draft meter regulation proposed by the Nigerian Electricity Regulatory Commission (NERC), which stated that electricity customers can now acquire meters under a 15-year lease facility from the discos guaranteed by third party meter providers.

It recalled that NERC had proposed a business model for the licensing of Meter Services Providers (MSP) who would provide for the financing, procurement, installation, maintenance and replacement of electronic prepaid meters for end-users of electricity.According to the document, customers would make payments to MSPs through the collection account of the discos or through the vending platform for all meters supplied by the providers.
According to a report published by NERC on its website, out of 7,476,856 total number of registered customers as at August 2017, only 3,451,611 (46%) were metered.

Therefore, CSL noted that, with this development, Nigerians, who previously did not pay for meters (at least on paper) would now pay for their own their meters and would not be allowed to remove them when moving houses. “We believe NERC is going this way, as previous efforts to ensure adequate metering have all failed.

“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,” it added.
The report stressed that effective metering view would be a 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 N50,000-60,000 (US$138.9-166.7) to get their own meters.
“If by this draft regulation, getting meters can become a seamless process and less cost heavy (as payments are to be made piecemeal over the 15-year period of the lease), we believe it may enjoy some level of success,” it added.

In a related development, the Interim Managing Director of the Transmission Company of Nigeria (TCN), Usman Gur-Mohammed, recently revealed that the TCN recorded a new national peak electricity transmission capacity of 5,155.9 Megawatts (MW) on December 8, exceeding a previous national peak of 5074.70MW.

According to him, nationwide average peak load capacity at the beginning of the year was about 4,000 MW.
He also noted that the Transmission Rehabilitation and Expansion Programme (TREP) had attracted financing for several projects from donor agencies and the completion of those projects would result in expansion of the grid transmission capacity to at least 20,000MW in four years.
The Transmission Company of Nigeria (TCN) is in charge of transmission – wheeling power around the grid and installing transmission lines.

“It goes without saying that transmission is a critical aspect of the power value chain. The GenCos and the IPPs can ramp up available capacity closer to installed capacity; the discos can improve their distribution networks, optimise metering and improve collections efficiency; and gas supply and the gas transportation pipeline network can be made fit for (domestic) purpose.

“But, if it is not possible to transmit the electricity produced by the GenCos to the DisCos consistently and effectively, the entire system collapses figuratively and physically. Electricity cannot be stored so that which is not transmitted will be stranded due to lack of evacuation capacity,” CSL analysts explained.