Flaws in the Meter Asset Provider Regulations

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In this article, Caleb Adebayo identifies some of the flaws in the Meter Asset Provider regulations announced recently by the Minister of Power Works and Housing, Babatunde Fashola

In recent times, a lot has been happening, and rapidly too, in the Nigerian Electricity Supply Industry (NESI) in terms of regulations, guidelines, policies, and laws. Only about nine months ago, the Minister of Power, Works and Housing announced the Eligible Customer regime, and with it came much furore from the various value chain participants. Recently, a new set of Regulations emanated from the industry, the Meter Asset Provider (MAP) Regulations. Amongst other things, it seeks to close the metering gap which it estimates stands at over four million meters, attract private investment and of course, eliminate estimated billing.

I must commend the regulations, and the firm posture it adopts in mandating Distribution Licensees to ensure metering for their customers within a set time period. It is also economically advantageous, as it, while stretching the NESI value chain, opens new vistas for investment in the industry from private sector players. The matter-of-fact tone of the Regulations has ensured that a carte blanche standard of metering is not adopted where every Meter Asset Provider (MAP) operates at his behest in terms of quality, instead it has laid down certain technological benchmarks for MAPs seeking to participate in the procurement process.

In addition, the process for approval seems to be quite well thought out, commencing with the ‘No Objection’ authorization which is granted after conducting due diligence. For me, the interface of the public sector and organized private sector at the back-end of the NESI value chain, meeting at the intersection of providing value and solving a problem which has for a long time affected all players along the chain, is a welcome development, and one that must be extolled.
It is equally impressive the high level of transparency encouraged by the Regulations. The necessity for a newspaper publication of the monthly metering service charge and detailed roll out plan evince a system that intends to provide close monitoring not just from NERC, but from everyday consumers. Additionally, the alienation of companies for the bid rounds who have in them any participatory interests from Distribution Licensees aids the process to be as open as possible. The clear distinction too, of the metering service charge from the energy charge and the ring-fencing of the payment of the metering service charge to a dedicated account from which payouts will be made to the MAPs is a step in the right direction.

The requirements for MAPs to acquire insurance and the mandated securitisation framework for Distribution Licensees are very laudable steps that will ensure the financial sustainability of the metering drive. It is a value-add too, that under the Regulations, the rights and obligations of all players in the metering activity are outlined, with the end-user being assured in no mean terms that he has the right to be metered. Furthermore, the capping of unmetered customers after a defined period will serve as a motivation to accelerate the rolling out of meters.
I am worried though, about certain provisions. First, while I have no bone of contention regarding the length of time as per the 120-day deadline given to the Distribution Licensees for procurement, my worry is that the ‘Nigerian Deadline’ factor that has affected every other thing from BVN to National Identity Card Registration, possibly to the VAID scheme, will arise here again, and defeat the essence of the provisions under the MAP Regulations. Perennial excuses like technical glitches, counterparty failure and late funding are likely to arise at the point where the deadline looms and the law is to be enforced.

The requirement for several permits where a Meter Asset Provider intends to provide its services to a string of Distribution Licensees is worrying too. To my mind, it would be an overly herculean process, and except the turnaround time for the process is fluid -which is an unduly high expectation considering the bureaucracy surrounding government exercises- then investors will also be discouraged by the repetition of the same process. It would have been preferred if all that was required was perhaps a No Objection authorization for the Meter Asset Provider to deal with another Distribution Licensee, or like upstamping, in property law parlance, the Meter Asset Provider could only have to obtain an ‘upstamping’ on their permit in order to deal with a different Distribution Licensee.

With all said, the Regulations have come a perfect time; a time when electricity consumers have started to ask questions, protest estimated billing and demand accountability from these privatized distribution companies. It is hoped that the Regulations will birth a more efficient distribution regime, attract investors, and aid the troubling illiquidity in the industry. It is likewise the hope of the public that the Regulations will live up to its firm and no-nonsense mandates for all the relevant actors and will continually demand the highest levels of performance, transparency and optimal delivery from the MAPs and Distribution Licensees.

– Caleb Adebayo is a lawyer with Wole Olanipekun and Co., where he straddles the busy dispute resolution team and the nascent commercial team. He is keen on the intersection of Energy, Finance and Environmental Law. He can be reached at calebadebayoc@gmail.com