According to a recent public release by the Nigerian Electricity Regulatory Commission, customers that opt for the gradual payment option are allowed to pay in instalments within a period of one to 10 years, depending on the agreement between the MAP, Community Association and the DISCO. The MAP is expected to meter all the customers without meter in the given locality without exception. This phase ought to have commenced in August 2019.
The objective of the MAP scheme is to close the over 4.7 million metering gap in the Nigerian Electricity Supply Industry by 2021, even though independent sources believe that the metering gap is considerably higher.
The successful MAPs as part of the required documentation at the commencement of the scheme submitted a detailed Meter Rollout Plan, which indicated commencement dates and locations to NERC through its respective contracting DISCO. These plans were expected to be aligned with the respective DISCO meter rollout obligation which has earlier been set by the NERC.
Incidentally, NERC recently expressed concerns at the poor level of implementation of the scheme, citing huge discrepancies between meter rollout targets and actual number of meters deployed. It noted that only about 26,000 meters have been deployed under the scheme and reiterated the fact that DISCOs remained ultimately responsible for the deployment of meters. While calling on them to take appropriate action including calling up the performance bond of non-performing MAPs if need be, to ensure that metering targets are met.
Reports from operators indicate a number of challenges which if not addressed could derail the scheme. There are major discrepancies between the number of customers that have complemented the online application and those that have made payment and their meters installed in the upfront payment option.
Demand seems high with customers on estimated billing with single customers on a single account; this is understandable as they are predominantly the category of customers complaining of crazy billing and seem to be paying more than the electricity they have actually been consuming. The response from rural areas and densely populated localities on estimated billing with multiple consumers on single account seems poor. There are no incentives for this latter category to key into the scheme, as they envisage that they are likely going to pay more individually for electricity consumed with prepaid meter installation. The issues of affordability and willingness to pay have not adequately been addressed. The level of publicity for the scheme also seems to be poor.
On the supply side, MAPs seem not comfortable with the approved pricing for the meter specification to be supplied, as it is believed that the prices were largely unilaterally fixed. There are also complaints on the recent increase in the tariff for imported electricity meters from 10% to 45%, as this may negatively impact MAPs’ ability to meet the supply terms.
The proper implementation of the gradual payment option is crucial to the overall success of the scheme. The distribution companies should stand between the customers and the MAPs for contractual and payment purposes. The credit risk for the meters should be borne by the DISCOs, as they are best placed to manage the risk. This might be in some sorts of payment security on behalf of the customers to the MAPs. Attempts to make the MAPs carry the risk may mar the scheme. This is a critical factor to be considered for the success of this payment option.
The success of the scheme and the need to meet the 2021 target would largely depend on how proactively NERC addresses issues raised by operators, as this would require constant review of the operational terms of the scheme and address perceived impediments to its proper implementation, otherwise the scheme might go the way of the CAPMI scheme.
- Dr. Peter Idaewor, Costain, Lagos anabui2000@yahoo.com, 08185118935
[Punch]
