As households in Nigeria brace for tougher times due to the implementation of a 40 percent increase in electricity tariffs under the Multi-Year Tariff Order (MYTO), energy industry experts and power sector advocacy groups have called on President Bola Tinubu’s administration to review and complete the installation of 6 million proposed prepaid meters under the National Mass Metering Program (NMMP).
This is part of the solutions recommended for the new government to assuage the impending impact of the tariff review on the masses.
The call is coming on the sidelines of the order by the Nigerian Electricity Regulatory Commission (NERC) to the electricity distribution companies (DisCos) to implement the MYTO on July 1, 2023, amidst looming economic pressure on the electricity consumers in the country.
EnergyDay’s check showed that the MYTO was introduced by NERC to the operators in the Nigerian Electricity Supply Industry (NESI) to ensure cost-reflective tariffs in the Nigerian electricity market and provide a simple segmentation and evaluation of required operational expenses, overhead, and a real investment return to create transparent tariffs with incentive-based regulation.
While emphasizing that the implementation of the July 1, 2023 tariff increase remains sacrosanct based on market dynamics, the experts said that the review of Meter Asset Providers (MAPs) regulations and NMMP are both critical to ensure that electricity consumers are metered and billed accurately.
Mr. Emeke Ojoko, Executive Coordinator of NEPA Wahala, an electricity consumers’ rights group, in a chat with our correspondent, said that the only lifeline available for Nigeria in the face of the tariff increase is the completion of the remaining two phases of the National metering programme initiated by the former President Mohammadu Buhari’s administration.
According to him, the NMMP was supposed to be in 3 phases ( 0, 1 & 2,) in which 6 million meters were to be deployed. He noted that only phase 0 was completed with barely 1 million meters installed so far.
He also charged President Tinubu’s administration to revert to the initial design of the MAPR 2018, which provides for the supply, installation, and maintenance of end-user meters by other parties approved by the Commission.
He said, “The original MAPR template as articulated to the NERC was for independent metering companies to be licensed to supply meters on demand.
“The beauty of that initiative was that customers could simply walk into any meter company, pay for the meter, submit their utility account details for linking, and walk out. It would be the job of the meter provider to program the meter and install it for the customers within contract terms. Failure to install within contract terms would be actionable at the customer’s instance.
Comparing the MAPR 2018 and the final MAPR, the Executive Coordinator of NEPA Wahala disclosed that the latter created an aberration: meter asset providers who are extensions of the DisCos, who cannot be held accountable for not metering within contract terms because there is no contract between them and the customer.
He said that the money for the meter is paid to DisCo’s account which decides when to install the meter, adding that due to the structure of the regulation, there is no significant penalty for failure of both DisCos and MAP to install within 10 working days after payment, as provided by the MAPR 2018.
Ojoko, therefore, charged Tinubu and the 10th national assembly to pass an act to institutionalize local content in the electricity industry (as was done in the oil and gas industry), tax holidays for meter manufacturers and provide low-interest loans to meter manufacturers.
He emphasised that if more meters are manufactured locally, it would reduce the demand for forex to import meters and eventually create an export market for locally manufactured meters.
Ayodele Oni, partner, Bloomfield Law Practice, on his part, urged President Tinubu’s government to inaugurate a national mass metering implementation committee that would work closely with the Discos to prevent misappropriation of meters with a commitment to complete the phase 1 and 2 of the NMMP.
Oni also charged President Tinubu to liberalize meter procurement by creating bands of various customers- i.e the customers who can pay for the meters upfront and those who cannot.
He however noted that the NMMP and the MAP were not complete failures under Buhari’s administration, but stated that the initiative was poorly implemented.
Mr Martins Arogie, Chairman, Power Sector Group, Lagos Chamber of Commerce and Industry, LCCI, in a chat with EnergyDay, explained that President Tinubu’s government should be committed to addressing the commercial viability of all the various metering projects initiated by the previous administration.
Arogie noted that the review should focus on the critical issue that metering supposed to solve for a commercial enterprise. This according to him will probably reduce theft and enhance collection.
He said, “However, it is debatable if this has been achieved with the efforts put into previous metering projects. No commercial enterprise would be willing to invest in metering (additional capital expenditure) if they do not believe that it would enhance their business operations through a reduction in energy theft and improvement of collection.
“So, what the Government needs to do differently is to ensure that there are stern and swift punishments for those who seek to circumvent their meters and engage in energy theft.
“Mobile electricity courts can be established so that anyone caught can be quickly prosecuted. This may deter theft and meter tampering and ensure that the primary objective of that project can be accomplished.
The LCCI Power Sector Group Chairman noted that the suggested measure may likely reduce consumers’ appetite for by-pass of meters due to the level of sanction and attendant consequence of energy theft.
Arogie also emphasised that the Government may still need to continue to provide some funding in terms of loans for the national mass metering programme project. “Although as you would expect from any business the cost of this funding would be borne by the customer,” he said.
Adetayo Adegbemle, Convener and Executive Director, PowerUp Nigeria, on his part, noted that the power sector has over the years been heavily dependent on inflation and foreign exchange benchmarks against dollars. This, according to him, is one of the reasons for the failure of the NMMP and MAPR.
The Executive Director of PowerUp Nigeria emphasised that it is inappropriate for the NERC to base electricity tariffs against economic variables that the country does not have any control over.
Adegbemle therefore charged President Tinubu’s administration to review the NMMP and complete the implementation of phase 1 and 2 of the project.