April 21, 2024

MAP prepaid meter refund: NERC orders Discos to refund electricity consumers via monthly Energy Credit spanning 3 years

 

Oredola Adeola

 

Electricity users in Nigeria have been directed by the Nigerian Electricity Regulatory Commission (NERC) to seek a monthly refund in form of ‘ENERGY CREDIT’, spanning a period of three (3) years, from electricity distribution companies (DisCos) for prepaid meters purchased under the Meter Asset Provider (MAP) scheme, in compliance with the national mass metering regulations 2021.

 

 

The order, NERC Order No:NERC/2023/001, which was obtained by EnergyDay  on Monday and signed on March 20, 2023, by Sanusi Garba, Chairman of the Commission, and Dafe Akpeneye, Commissioner, Legal, Licensing & Compliance.

 

This order is coming on the sideline recent upward review in the prices of the single-phase meter (4G, smart) to N81,975.16 from N58,661.6, and Three-phase meter (4G, smart) raised from N109,684.36 to N143,836.10.

 

Based on the circular exclusively obtained by EnergyDay, tagged ORDER ON THE REIMBURSEMENT METER COST, NERC disclosed that pre-paid meters have an average useful life of 10 years.

 

The Commission therefore stated that the adoption of a 10-year repayment cycle for customer reimbursements aligned with the current term sheet adopted by the Central Bank of Nigeria and other financial institutions for meter acquisition loans.

 

 

NERC noted that the Meter Asset Provider and National Mass Metering Regulations, 2021(the Regulations) Section 8(f) provides that “Distribution Licensees are obligated to reimburse customers who pay for meters under the MAP framework through equal instalments of energy credits, at the time of vending, with the cost of the meter amortised over a maximum period of 36 months.

 

 

It also added that Section 24(1) (b) of the Regulations provides that “where a Customer elects to make upfront payment for meters under these Regulations, the cost of the meter shall be refunded through energy credits by the Distribution Licensee.

 

 

The reimbursement schedules shall be as approved by the Commission, having regard to an evaluation of the financial standing of the Distribution Licensee. This provision also applies to upfront payment made by customers upon commencement of the MAP framework in 2018.

 

 

The Commission conducted an evaluation of the financial standing of the DisCos which resulted in a review of the hitherto 36-months reimbursement period.

 

 

NERC further hinted that the Order seeks to ensure fairness, transparency and accountability of the metering process under the MAP framework. It also added that the Order provides a fair mechanism for the reimbursement of meter costs to customers under the scheme.

 

 

It noted that the Order also aligned the amortizations period for reimbursement with the 10 years average useful life of electronic meters. It added that the Order also aligned the amortisation period of the cost of MAP meters with the repayment of the concessionary tenor of other financing sources for metering.

 

 

Recognise meters installed under the MAP framework in the Regulatory Asset Base (RAB) of DisCos.

 

 

NERC said that it imposed the regulations as an obligation on the DisCos to reimburse customers that pay for meters under the MAP scheme through equal installment of energy credit over a 36-month period.

 

 

EnergyDay gathered that based on the findings of NERC from the evaluation of their financial position, the DisCos cannot fund an amortisation period of 36 month for repayment to customers whilst meeting their other upstream obligations in the Nigerian Electricity Supply Industry (NESI).

 

 

NERC further noted that the cost of the prepaid meter pai by the customers under MAP shall be amortised over 120 equal installments and reimbursed through energy credits computed based on the prevailing tariff at the time of vending.

 

“Where a customer does not vend in a given month or months, the DisCos shall at the point of the next vending, refund the accumulated energy credits due to the customers for the period not vended. Where a postpaid customer purchased a meter under the MAP framework, the reimbursement by the DisCO shall be in the form of a rebate on customers,” the order stated.

 

It further noted that the monthly invoice must reflect the fixed monthly reimbursement computed on the cost of the meter spread over a period of 120 months.

 

The DisCO shall ensure that the refunds of the cost of a meter appears as a distinct line item on the vending receipt of prepaid customers and monthly bill of the postpaid customers.

 

The line item should clearly indicate the energy cost, the corresponding energy value being refunded, and the outstanding balance of the cost of the meter.

 

The DisCos have therefore been advised to file monthly reports with the NERC containing a breakdown of the total monetary value of refunds to customers through energy credit in accordance with the Commission’s prescribed template.

 

NERC Order further emphasised that the whole meter installed under the MAP framework shall be included in the RAB of the DisCos by the Commission at the next major or extraordinary tariff review.