Closing the metering gap to achieve success
For instance, the total number of customers captured in the records of industry operators in the Nigerian electricity supply industry (NESI) is put at 5,172,979, representing 18.65% of Nigeria’s total household which stands at 28,900,492 according to the national bureau of statistics 2006 data. However, a large number of people enjoy electricity illegally as they […]
For instance, the total number of customers captured in the records of industry operators in the Nigerian electricity supply industry (NESI) is put at 5,172,979, representing 18.65% of Nigeria’s total household which stands at 28,900,492 according to the national bureau of statistics 2006 data. However, a large number of people enjoy electricity illegally as they are not registered by operators in the industry. So far, only 2,893,701 of registered customers are metered while a staggering 2,355,04 are unmetered. A further 701,385 of this number have faulty meters. Sad, very sad. All together, 54.83% of registered customers are either not metered or have faulty ones. Surprisingly, meters were discovered to be available in all the distribution companies Visited by the metering committee. Money for meters were paid in bank draft to chief executives with no timeline on availability and installation. There were also instances of people making payment for meters and never got supplied for years . if ceos can pledge to meter customers within one week ,then there is a major problem in the power sector reform process. First, the roadmap and MYTO2 have taken off well, but the headship of distribution companies must shed the toga of inefficiency and corruption to align with the reform vision. Operators had complained of inadequate funding for total meter coverage which necessitated the release of N2.9billion just in 2011. So far not one ceo has given account of the money meant for meters. Although the situation has improved slightly , but it will still not meet the target set by the industry regulator.
According to the report, their is an absence of complete autonomy in addition to not having competent local manufacturers which further explains existing metering gap in Nigeria’s electricity supply industry . With this situation , estimated billing pervaded the services of distribution companies all over the country. The practice of estimated billing then took over in all business units as it was the only way to shore up revenue . The report revealed that ‘poor supply of electricity in the country and gross inefficiency on the part of the discos to curtail operational losses…remain the only available option’. With the new methodology released by the regulating commission ,three classes of customers are likely to receive estimated bills , they those with faulty meters, customers whose meters cannot be read and existing customers without meters.
Average consumption of those metered is applied to a cluster of residents to arrive at estimated billing, however, customers have always interrogated the parameter used in arriving at the figure describing it as unscientific. Key committee recommendations have received the endorsement of the Nigerian Electricity Regulatory Commission which regulates the sector such as , monitoring and enforcement. Also steps are been taken to implement existing regulation on metering ,billing and cash collection as well as overall improvement in customer related issues.
The multi-year-tariff-order is the regulation which establishes the electricity tariff to be paid by Nigerians as long as the cost of providing electricity and improving same are borne by the consumers -cost reflective. Primarily the model calculates the revenue requirement of the power sector and then extracts the price that must be charged accordingly in line with the system capacity. The thinking behind this model is to ensure that with quantity of electricity increasing, the price of the product will fall. Basically the multi-year-tariff-order also presents to Nigerians a unified way of determining the total industry revenue requirement. The framework was designed to provide a 15-year projection for tariff in the sector as a result of long gestation period required for investors to recoup their investment. Ultimately, the model will be used to set wholesale and retail prices in the Nigeria Electricity Supply Industry -NESI.
In arriving at the cost reflective tariff , key variable were considered including inflation, interest rates , and exchange rate. Others were plant load factor, losses, gas price, and depreciation. Projected generation capacities as well as capital and operating expenditures were also factored . There is also a condition that operators would demonstrate efficiency over time. So much have gone into reviving the power sector by all assessment . Recently the Senior Special Assistant to the President on public affairs said that the current 4.300 megawatts(mw) peak period will be increased to 9.000 (mw) in the next few months. Good news. Nigerians would want to see generation improved , just as transmission and distribution record tremendous improvement. Rules which govern operations in the industry were recently reviewed in line with current trends and market realities by the Nigerian Electricity Regulatory Commission. Did I hear someone say NERC is not working? The reform train has left the bus-stop and there is no stopping, but the management team of the discos must be overhauled to reflect the current mood in the sector as soon as possible.
Ihenacho is of the Nigerian Electricity Regulatory Commission (NERC)