Fashola, Discos’ dispute threatens meter rollout

The recently introduced Meter Asset Provider Regulations may have hit a snag as electricity distribution companies insist that metering is no longer in their hands, ’FEMI ASU writes

Despite the recent declaration by the Minister of Power, Works and Housing, Mr Babatunde Fashola, power distribution companies have failed to agree that the responsibility of providing meters to customers still lies with them.

The PUNCH quoted Fashola as saying on Monday that the Discos still had the responsibility of providing meters to customers as opposed to the recent position expressed by the Association of Nigerian Electricity Distributors, the umbrella body of Discos in the country.

He said the Meter Asset Provider Regulations, which was unveiled by the Nigerian Electricity Regulatory Commission in March this year, did not completely remove the responsibility of providing meters by the Discos.

The minister had, at the 29th power sector stakeholders’ meeting on Monday, said, “MAP, which was introduced to address meter supply gaps, provides relief to the Discos of the financial burden of supplying meters, and allows entrepreneurs to take this up as a business and diversify source of meter supply.”

The MAP Regulations 2018, which introduced another class of operators in the power sector called meter asset providers, is expected to eliminate estimated billing practice, attract private investment into the provision of metering services, and close the metering gap through accelerated meter rollout.

“The issue of metering is no more in the hands of any Disco in Nigeria. The regulator, of course, through the Federal Ministry of Power, Works and Housing, has taken over the issue of metering; that is the reason for that MAP regulation,” the Executive Director, Research and Advocacy, ANED, Mr Sunday Oduntan, said at a press briefing on July 24 in Lagos.

NERC had announced on March 12 that power distributors would no longer have the sole responsibility of providing meters to electricity consumers.

When contacted on Wednesday by our correspondent, the Discos’ spokesperson, Oduntan, declined to respond to the minister’s statement.

He, however, said, “At the 18th monthly power sector meeting, which was held on August 14, 2017, the Minister of Power, Works and Housing, Mr Babatunde Fashola, stated that the supply of meters is not exclusive to the Discos; that metering is not a primary duty of the Discos. That they were taking it out of the Discos’ hands.”

Oduntan stated earlier that the Discos were ready to support any move that would enable all customers to have meters.

He said, “The MAP Regulations is a baby of NERC and the Federal Ministry of Power. Our own role is to cooperate with them. They are the ones that own it; we are the ones to follow all the instructions as to how they want those things to be done, and we are willing and ready to do that.

“So, we support MAP. Only those who are ignorant think that we are not happy with it. What we are saying is that anything we want to do in the power sector must be done with transparency, value for money and integrity. That is what we are interested in. We will be very happy to see MAP succeed.”

He said the Discos were still rolling out meters to customers, adding that they were obligated to supply 1.7 million meters in five year in their performance agreements.

“So far, we have done 88 per cent of that. It is in our interest to meter our customers; we lose more money with estimated billing. Customers are not all metered because of two reasons: the huge gap and liquidity crisis.”

He said the Discos would continue to provide meters to customers “because we need to end the contention over estimated billing.”

At the August 14, 2017 meeting, Fashola had said, “While it is true that Discos have the obligation to meter customers, the law does not vest the monopoly of meter supply in them. Anybody who qualifies under the safety regulation by Nigeria Electricity Management Services Agency and under the licences issued by Nigerian Electricity Regulatory Commission can supply meters to customers under conditions by law.”

A Deputy Director, Consumer Affairs in NERC, Mr. Shittu Shaibu, in a telephone interview with our correspondent on Wednesday, argued that the introduction of the MAPs did not take away the responsibility of providing meters from the Discos.

“So, if somebody is coming in to help you with funding of a particular aspect of your business, does that mean the person is taking over your responsibility? Absolutely not,” he added.

He disclosed that the Discos were already implementing the procurement of the meter asset providers, noting that the MAP Regulations took effect in April and the procurement process commenced on July 1, 2018.

Shaibu said, “As soon as they finish the procurement, they will now come to the commission for approval. We have given a ‘no objection’ certificate to more than 50 MAPs now for them to start competing. The more people you have competing, the better it is for the customers as this will help bring down the prices of the meters.

“We are expecting that by January 1, 2019, all the MAPs would have been fully in place; it might be earlier depending on the procurement process of all the Discos. By January 1, metering is supposed to be done by MAPs.”

A power sector analyst at Ecobank, Mr Kareem Jubril, said the argument between the Discos and the minister could affect the implementation of the MAP Regulations.

He said, “If they don’t work hand in hand, it is going to create an issue. It is quite unfortunate that we are having this kind of situation. If it is not resolved, it is definitely going to affect it.

“Traditionally, Discos should be responsible for the distribution of meters. It will be a big mistake to take that responsibility away from the Discos. The thing is that government, in good faith, is trying to interfere in terms of making sure that the meter distribution is actually increased. But I think it is just a case of resolving issues between two parties, the regulator and the distributors, to find an amicable way of how the meters will be distributed and paid for.”

According to the MAP regulation, the distribution licensee (Discos) and MAP shall enter into a metering service agreement, which shall provide for the number of meters to be installed by the MAP in the distribution licensee’s network over an agreed period and the recovery of the cost of meter asset plus a reasonable return over a period of 10 years, among others.

The metering gap for all distribution licensees was put at 4,740,275 meters as of December 31, 2017.

“This is projected to significantly increase upon the conclusion of the ongoing customer enumeration exercise,” NERC said.

Based on the proposals submitted by the core investors in the Discos during the privatisation of the power firms in November 2013, about 6.52 million new meters were expected to be installed over the course of five years.