Metering: Why NERC can’t enforce February 28 directive to DISCOs

• How Poor Customer Enumeration, Data Hinder Sector Growth
• Experts Seek Review Of Electricity Act

Stakeholders in the power sector have expressed worries about recent announcement from the Nigerian Electricity Regulatory Commission (NERC) that it would sanction electricity distribution companies that fail to meter customers in their networks before February 28, 2017.

Speaking to The Guardian over the weekend, the stakeholders said the situation, which they said was further worsened by poor data, has necessitated a renewed call for a more independent electricity regulator.

Checks at NERC indicated that the country does not have any reliable enumeration of the nation’s electricity consumers, showing, where they are, what they consume and how many have been metered.

Associate Professor of Energy and Electrical Law, University of Lagos, Yemi Oke, said NERC should push for compliance and other institutional methods of ensuring that the sector players comply, instead of merely imposing penalties.

His words: “A good sector will mature from government to self-regulation and voluntary compliance where the business is profitable. As to metering, this is where the Act (the Electricity Power Sector Reform Act of 2005) got it wrong. Discos will not want meter, because it will result to loss of revenue.”

Oke called for an urgent review of the EPSR Act to position it for post-reform sector governance, arguing that states should be encouraged to set up own electricity regulatory bodies.

Also, pioneer Managing Director/CEO of the Nigerian Electricity Bulk Trading Company (NBET), Rumundaka Wonodi, tasked NERC to have a rethink of its directive, but rather focus on liberalising metering.

His words:  “It is good to see NERC attempt to enforce some discipline in the operations of the DISCOs, with regards to metering targets, but the truth is that if NERC is looking to cause the DISCOs real financial pains through the fines, it should have a rethink unless this is a shaming exercise. Why? With a majority of consumers yet to be metered, the incentive for a DISCO that is already struggling with revenues is to spread the fines across its unmetered and unsuspecting customers through estimated billings. What NERC needs to do is collaboration with the Nigerian Electricity Management Services Agency (NEMSA) is to roll out regulations and guidelines that will liberalize metering in the industry.”

Turning to NERC, Rumundaka, who is the Founder/CEO of ZKJ Energy Partners, said:  “Allow consumers to obtain standardized meters from licensed meter providers without recourse to the DISCOs, thereby introduce competition in metering solutions.

“In addition, abolish the across board Capex (capital expenditure) provision for meters in the tariff. Instead, allow DISCOs to incorporate a line item in consumers’ electricity bills for recovery of any capital associated with provision of meters.”