From Isaac Anumihe, Abuja
Since November 11, this year, when the National Electricity Regulatory Commission (NERC) threw spanner in the works with its intention to increase the cost of meters, the industry has lost its peace.
While a handful of industry players and consumers are calling for a reversal of the policy, others are pushing for a return to Credit Advanced Payment for Metering Initiative (CAPMI).
CAPMI enables willing customers to pay the cost of the meter into a dedicated account jointly managed by the distribution company (DISCO) and meter vendor/installer.
Once payment has been effected, the customer will have his meter installed within 45 days by a NERC- accredited vendor/installer.
Earlier, NERC had in its notice, published that due to the macro-economic parameters, it was going to raise the price of a single-phase meter from N44, 896.17 to N58,661.69, while a three-phase meter will now go for N109, 684.36 as against N82,855.19.
In a statement, the Chairman of NERC, Mr Sanusi Garba, said: “Pursuant to the provisions of the Meter Asset Providers (MAP) and the National Mass Metering Programme (NMMP), National Electricity Regulatory Commission (NERC) noted the recent changes in macro-economic parameters and hereby approved an upward review of the unit price of meter.”
Sanusi said that in arriving at the approved unit price, the commission had, in particular, only considered changes in foreign exchange and inflation since the last review in June last year.
“This price review is subject to change upon the conclusion of the procurement process under Phase One of National Mass Metering Programme (NMMP). The price review is effective from November 15, 2020,” the chairman said.
Under the NMMP, some firms were licensed by NERC to manufacture and install meters free to consumers. These firms are paid by the Central Bank of Nigeria (CBN) from the N250 billion provided by the Federal Government.
But under MAP, some companies were asked to import meters which are distributed by DisCos for a fee.
However, it is the MAP arrangement that was affected by the review while the NMMP arrangement is still running free of charge, but slowly.
So far, NERC said that a total of 900, 000 units of the meters have been installed under the takeoff phase, a situation that generated a fresh call for CAPMI which allows customers to buy meters anywhere by themselves.
In reaction to the uproar which the review generated, NERC, clarified that consumers are at liberty to choose the package they want – NMMP – which is free. Or MAP – where consumers would pay a little extra to buy meters.
“We wish to reiterate that the National Mass Metering Programme (NMMP) designed to provide all consumers of electricity with meters is a policy intervention of the Federal Government supported by CBN concessionary loans to DisCos
“This laudable initiative is very much on course. A total of 900, 000 units of the meters have so far been installed under the takeoff phase of the scheme without any payment of the benefiting consumers. While this doesn’t cover many of the unmetered customers, we are pleased to inform electricity consumers that the next phase under which four million units of meters would be procured from the meter manufacturers has commenced.
“We once again, state that under this National Mass Metering Programme (NMMP), consumers would not be required to pay directly for the meters.
“Pending the conclusion of the NMMP procurement process and the commencement of manufacturers/installation, consumers may elect to acquire a meter immediately from MAP.
“The regulatory framework approved by the commission under the MAP/NMMP regulations provide for the refund of the cost of the meter through energy credits to the customers at the time of vending.
“The recently issued notice by the commission on the adjusted cost of meters is designed to protect consumers from arbitrary pricing by any MAP in the context of recent changes in macroeconomic parameters affecting the cost of production,” NERC said.
While calling for a return to Credit Advanced Payment for Metering Initiative (CAPMI), President, Nigerian Consumer Protection Network and member, Presidential Ad hoc Committee on the Review of Electricity Tariff in Nigeria, Kunle Olubiyo, said that CAPMI should return to fast-forward the process
since MAP and NMMP have failed to meet the yearnings and aspirations of consumers.
“I think basically what the government is trying to do is to increase the delivery course. The essence of the National Mass Metering Programme (NMMP) is to encourage indigenous meter manufacturers. They didn’t want to do importation. The Meter Asset Providers (MAP) was an open scheme that allows people to import meters. Once you are a meter service provider (MSP) or a meter vendor registered by NERC having been subjected to Nigerian Electricity Management Services Agency (NEMSA), you are free to bring in meter from anywhere and get it branded in your company’s name.
“But under the NMMP, the emphasis is to promote indigenous meter manufacturers. That is the difference. That one said that we should promote made-in-Nigeria meters. So, you go and sign agreement with a DisCo if you are a MAP licensee. Once the DisCo gives you an order and you deliver the meters, then you can go to the Central Bank of Nigeria (CBN) and get paid. So, after discussing with indigenous meter manufacturers, the cost element of the input into the production of meters (considering the forex and inflationary trends) the (NERC) increased the cost.
“There are places you go, people are buying meters. So, the government is saying that if you buy meter you will get a refund. When MAP was introduced on May 1, 2019, NERC said that if you buy a meter you would be refunded for it, but untill now they have not come up with a framework – two years after.
“Federal Government said that they have deployed 900,000 meters in Phase One and the metering gap is between eight million and 10 million. The government has so far covered only 10 per cent of the metering gap. So, the huge gap includes the replacement of some old and damaged meters and there are new houses springing up here and there. So, if you look at the population ratio per meter demand and what is available, we still need to do more.
“That is why we are suggesting that we should go back to CAPMI which gives room for us to pay so that we can get our refund.
“The amount of money required for the funding is huge. The amount required is far more than the N250 billion which the government has provided. Though it is the right step in the right direction, it is a scratch on the surface. If we are moving at snail-speed and the metering gap continues to widen, then there will be room for corruption because when people need meter they are ready to bend backwards and do anything under the table and get meters.
“The meter is built into the cost element of tariff. Even before now meters are usually factored into tariff.
“The major problem is the regulatory follow-up. There are a lot of beautiful ideas, but the captain of the ship has jumped the ship.That is just the problem we have.
“It is not supposed to be the headache of the presidency to inject money into the power sector if we had gotten it right with the regulators. If Bureau of Public Enterprises (BPE) and NERC had gotten regulatory assertiveness right, there wouldn’t have been any problem. It is not enough to churn out regulations, there must be serious follow-up. The law itself has no effect if there is no follow-up or sanctions for infraction or impunity.
“NERC and BPE have failed to do what they have been employed to do. There are too many regulatory subterfuge, regulatory summersault, regulatory uncertainty and regulatory capture in the system. Regulatory capture is when the people that are supposed to be regulated are more powerful than the regulator,” he explained.
In its own remarks, the Coalition of South East Youth Leaders (COSEYL), the umbrella body of the youth groups in the Southeast geopolitical zone, is alarmed over the current move by NERC to increase the price of electricity meters.
“It is gross insensitivity on the part of the Federal Government to suddenly approve sale of electricity meters when Nigerians are suffering and dying as a result of the increase in cooking gas price which is sold for N800 as against N350.
“Calling for the probe of the regulators, President-General of the group, Honourable Goodluck Egwu Ibem, said: “We call on the Economic and Financial Crimes Commission (EFCC), Independent Corrupt Practices and Other Offences Commission (ICPC), the National Assembly and other relevant anti-graft agencies to probe the activities of NERC and the DisCos to ascertain what happened to those meters that were procured to be shared free of charge to Nigerians,” he said.