The Meter Asset Provider (MAP) Regulation Number NERC/R/112, which became effective on April 3, 2018, introduces meter asset providers as a new set of service providers in the country’s electricity supply industry. Now, under the National Mass Metering Programme, Distribution Companies are set to begin the metering of consumers across the country. Can electricity consumers heave a sigh of relief? MUYIWA LUCAS writes.
The joy of Lanre Ogunye, a resident in Akute, Ifo Local Government Area, Ogun State, knew no bounds when his pre-paid meter was installed in his house. For him, it was a dream come true after over nine months of waiting for same.
But more joyous for him was the fact that he would be liberated from the shackles of the oppressive estimated billing. “It was freedom at last for me when I got the meter. I had suffered seriously from the yoke of estimated billing from my electricity provider. Now I can plan my electricity consumption and be sure that I am paying for exactly what I am consuming,” Ogunye said.
Indeed, the several millions of electricity consumers in the country may now heave a sigh of relief. This is on the heels of the announcement of meter roll out by various electricity Distribution Companies in the country.
Blazing the trail last week, New Hampshire Metering Services Limited, a subsidiary of New Hampshire Capital Limited, announced immediate plans to roll-out over 404,000 smart prepaid meters for Ikeja and Ibadan Electricity Distribution Companies under the MAP scheme.
The General Manager, Operations, New Hampshire, Mr. Isaac Omoyeni, revealed that the company is providing metering services in Ikorodu and Epe in Lagos State under the Ikeja DisCo (IE) franchise area, while it is providing metering services in Ilorin, Oyo, and Ogbomosho under the Ibadan DisCo franchise area.
He stated that the company entered into long term metering services contracts with both DisCos to finance, procure, install and manage prepaid meter assets and also ensure the provision of prompt metering services to electricity customers in both Discos.
Omoyeni further stated that the meter roll-out programme by the company, which began in 2019, would soon enter its second phase, which is the mass metering of electricity customers within its coverage areas under a monthly payment amortisation plan.
To ensure the company has adequate stock of meter inventory for its mass metering, New Hampshire has partnered with several international meter-manufacturing companies to produce high quality smart prepaid meters. The firm has also entered into meter purchase agreements with several local meter assemblers to purchase their assembled meters in line with the local content requirement of the MAP regulations.
In addition, the firm said it has developed proprietary technology systems and meter installation apps to manage the installation and commissioning of prepaid meters.
“Our Meter Ordering Services (MOS) system is our technology platform which was specifically designed to ensure the seamless end-to-end provision of metering services to electricity customers, from procurement to the installation and commissioning of the meters at the customer’s premises,” he explained.
According to him, the company’s MAP operations currently provide direct employment for over 400-meter installers and field engineers who handle meter maintenance and repairs. “We would engage more than 1,000 trained meter installers when we fully commence our mass metering roll-out. The company has been able to build capacity using local workforce and youths within our areas of operation and enjoy significant support from our host communities who are major beneficiaries of our local labour recruitment,” he said.
In Abuja, the Abuja Electricity Distribution Company (AEDC), earlier in the week, began the metering of 900,000 customers under the National Free Mass Metering Programme. At the flag-off ceremony, AEDC’s Managing Director, Engr. Ernest Mupwaya, revealed that the cost of the meters is N93 billion, adding that the amount will be sufficient to meter all customers including replacement of defective meters.
According to him, “between now and December 2021, AEDC has planned to install over 101,000 meters at a cost of N6 billon without charging customers. The rest of the meters will be installed 18 months after, through a comprehensive roll out programme that will result in simultaneous installations in all three states of Niger, Kogi and Nassarawa states in addition to FCT.”
He explained that with the project, the Federal Government has activated its 40 per cent shares in the company. Mupwaya said the significance of the programme is that it has been designed with sufficient resources to meter all customers.
His words: ‘The Federal Government of Nigeria (FGN) who has 40 per cent shareholding, has sourced sufficient funding to support discos through a low interest shareholder loan that will make it possible for Discos to receive sufficient meters to close the metering gap for good.” He recalled that over the years, the company has embarked on various metering initiatives such as Credit Advanced Payment for Metering Implementation (CAPMI) and Meter Asset Provider (MAP). These programmes, he said, have achieved some successes that resulted in the metering of over 300,000 customers.
Similarly, Eko Electricity Distribution Company (EKEDC), has also begun its distribution of smart electricity meters to customers following a simultaneous launch events of the scheme in Kano, Kaduna, Ikeja and the Eko Distribution Companies franchise areas. EKEDC’s General Manager, Corporate Communications, Godwin Idemudia said the distribution will begin in the Surulere axis of Lagos State. He explained that the NMMP is in fulfilment of the Federal Government’s and the Discos commitments to close the metering gap in the country and enhance the revenue collection of DisCos.
He said that under the new arrangement, DisCos are expected to go from location to location with their respective Meter Asset Providers to provide and install meters for their customers. Eko Electricity, he revealed, will roll-out over 100,000 meters in the first phase of the programme from the locally manufactured companies such as Mojec International Limited and Momas Meter manufacturing company.
Idemudia disclosed that the NMMP will increase Nigeria’s metering rate, eliminate estimated billing and strengthen the local meter value chain by increasing local meter manufacturing, assembly and deployment capacity.
Benefits
Mupwaya is convinced that the metering of customers has a huge positive implication not only to the electricity industry but to the entire economy in a number of ways. One of such benefits is in the area of job creation and employment through installation and inspections of meters after installations. Other jobs to be created through this are in meter manufacturing, logistics and supply chains associated with making meters available in the country.
Other benefits include improvement in the transparency in electricity transaction which will result in increased revenues that can be channeled into service improvement; improved services, which will support improved economic activities that will impact both informal and formal sectors. These, it is believed, will lead to electricity industry transformation along with numerous spillover effects to the economy.
Idemudia sees the benefits as a means to also reduce collection losses, increase financial flows to achieve 100 percent market remittance obligations of the Discos and support the country’s economic recovery by creating jobs in the local meter value chain whilst also ensuring customers only pay the exact value for their energy consumption.
Challenges
Omoyeni stated that while the MAP scheme has recorded significant success so far, there are several challenges facing the implementation of the scheme. “One of such challenges is the inability of MAPs to secure foreign exchange to import sufficient quantities of prepaid meters, as well as the 35 per cent import levy charged on prepaid meters.”
He lamented that the inability of local meter manufacturers and meter assemblers to meet the 30 percent local content supply requirement as stipulated by the MAP Regulations has further constrained the company’s determination to accelerate the meter roll out programme.
He thanked the Federal Government for granting a one-year waiver on the 35 percent import levy to allow MAPs carry out bulk procurement and importation of prepaid meters to meet the demand of electricity customers.
However, he called for the immediate implementation of the Presidential waiver, as well as a clear framework, which MAPs can access the presidential waiver.
Asked if the waiver of the import levy would negatively affect local production of prepaid meters, Omoyeni stated that the existing in-country capacity for local meter manufacturing and assembly of meter components is not sufficient to meet the huge demand for prepaid meters by electricity customers.
To buttress his point, he stated that local meter manufacturers who are also MAPs have not been able to meet their meter rollout commitments under the MAP scheme.
He contended that to meet the huge demand for prepaid meters, it would require a combination of importation of FBU prepaid meters to bridge the current deficit in local meter assembly capacity and massive investments in local meter assembly lines.
He lauded the Central Bank of Nigeria for the new meter-financing framework but asked that the CBN framework be aligned with the existing MAP regulations to achieve the objectives and goals of the MAP regulations and finally close the metering gap in the power sector. He said that the CBN’s plan to provide long term financing to local meter manufacturers would help local meter manufacturers expand their present manufacturing capacity, and in addition, encourage more investment in new meter manufacturing lines.
However, he advised that the objective of the CBN should be to promote true local meter manufacturing and not just the mere assembly of meter components imported from China.
He stated that, “it will interest the public to note that the importation of FBU prepaid meters is more beneficial to Nigeria in terms of revenue generation to government, than the importation of SKD meter components. Nigeria also does not benefit from any foreign exchange savings by importing meter components as there is no significant price difference between importing FBU prepaid meters and SKD meter components.” Furthermore, Nigeria loses revenues on the lower import duty payments for SKD meter components, in addition to other fiscal incentives like tax waivers and other incentives provided to the local meter assemblers. The NNMP is expected to roll out six million meters for all connection points on grid without meters over the next 18 to 24 months and estimated to impact over 30 million consumers nationwide.
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