Tuesday, May 18, 2021

Tariff hike: Crazy electricity billing looms as meter scarcity persists 2 days to policy take-off

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Naija247news, Nigeriahttps://www.naija247news.com/
Naija247news is an investigative news platform that tracks news on Nigerian Economy, Business, Politics, Financial and Africa and Global Economy.
With just two days to the implementation of the proposed over 51 percent electricity tariff hike nationwide, investigations by Daily Trust have shown that pre-paid meter shortfall will make the DisCos to subject over five million customers to the detested crazy billing regime in the months ahead.
Despite the ongoing partial lockdown due to the COVID-19 pandemic, the Nigerian Electricity Regulatory Commission (NERC) has not issued any directive suspending the planned tariff hike.
Ahead of the hike, it provided a rebate from February 20, 2020 when it ordered the 11 power Distribution Companies (DisCos) to cap their estimated billing immediately and ensure they accelerate their metering strategies.
The regulatory agency had set the limit for which consumers can pay across the DisCos, based on the estimated monthly power supply the DisCos supplied to NERC.
Daily Trust checks have shown that the efforts by DisCos to provide metres for customers under the current Meter Assets Providers (MAP) scheme have been clogged by various hurdles that include the prevailing N1.7 trillion electricity market shortfalls and apparent complaints by DisCos over a 45 percent import duty on metering devices.
51% tariff hike looms, NERC mulls another hike after 9 months NERC last Monday concluded its tariff review consultations with the 11 DisCos and the Transmission Company of Nigeria (TCN).
The industry regulator has two to three weeks to review stakeholders’ submissions and approve the 51 percent tariff hike presented to it by the operators. The extra ordinary tariff review document obtained by this newspaper says another tariff hike may follow that of April 2020 after nine months.
It explained that the Average National Cost Reflective Tariff (CRT) had changed to N53.4 from January 2020 but NERC allowed N30.7 as the selling price since 2018.
However barring any emergency intervention in the face of the coronavirus pandemic and crash in oil price, that will end March 2020.
The Nigerian Bulk Electricity Trading Plc (NBET) has N600 billion loan, which currently pays for the N22.7 tariff deficit to the GenCos. Postponing the April tariff hike may worsen the N1.7 trillion shortfalls already recorded in the electricity market, the records say.
“In order to mitigate the impact of rate shock on consumers, it is proposed that the gradual increase shall commence on April 1, 2020,” NERC said emphatically in its recently concluded tariff review document.
Averagely, the DisCos will be allowed to start charging N46 from April 2020 raising the hike by 51 percent at an average increase of N15.3 from the current N30.7 tariff.
The tariff will then rise from N46 to N50.3 from January 2021, representing another six percent rise. Only high consumers off estimation by April As the implementation of the new tariff beckons, only high energy consumers are free from estimated bill if they are not metered by April ending.
The Residential 2 (R2) and Commercial 1 (C1) customers whose bills have been capped will have to bear the brunt until they are metered through MAP by Year 2021 or 2022. NERC has set three years for the unmetered customers to be metered beginning from May 2019.
To hasten this, it rolled out the capping of estimated billing regulations saying it is a trigger for DisCos to hasten the metering process so they can prevent revenue loss. NERC said DisCos must meter all higher energy consuming customers (MD) by 30 April, 2020 and shall not be disconnected as they are not liable to pay estimated bill again.
However, the unmetered R2 and C1 customers must not be billed more than a template NERC has approved for the DisCos. 5.7m customers without meter The latest customer data from NERC shows that as of September 2019, there were 9.675 million registered electricity customers.
However, 59.74 percent of them representing 5.779 million customers had no meter in their households; only 3.896m representing 40.26 percent had meters. NERC linked the increase in metered customers to the MAP scheme and is hopeful that within 3 years, current metering gap could be bridged if the DisCos are consistent.
MAP metering target records from 10 of the DisCos obtained from the Nigerian Electricity management Services Agency (NEMSA) indicates that they will deploy 5.545 million in four years from May 2019.
They should install 1.064m meters in 2019 but figures show a shortfall. Another 2.674m meter installation is targeted this year.
For the Year 2021, the MAP firms will install 1.593m meters while 313,637 meters will be installed in 2022. Eko DisCo recently said it targeted metering all its customers by March 2021.
Its head of Power Procurement and Regulatory Department, Nosa Igbinedion said already the DisCo has metered 245,915 customers while 253,768 customers are unmetered. It has engaged seven MAP firms to attain the target.
The Abuja Electricity Distribution Company (AEDC) said it has deployed 170,239 meters in 2019, of which 81,155 meters were installed under MAP. The Managing Director of AEDC, Engr. Ernest Mupwaya, said the DisCo plans to reach 867,291 installed units by 2022.
Kano Electricity Distribution Company (KEDCO) has also responded to the capping of estimated billing rule, saying it was intensifying effort to install 75,000 meters in three months using five MAP vendors.
The Managing Director of KEDCO, Dr. Jamil Isyaku Gwamna said, “Soon more vendors will be brought on board and we will push until every households get a meter; because as far as KEDCO is concerned, it is meter time.’’
Hurdles persist despite metering target In spite of the targets being set, certain hurdles may clog the progress of these meters while the consumers continue to suffer estimated billing. One of such is the high import duties for meters. AEDC head, Mr. Mupwaya had disclosed that,
“There is a 45 percent import duty on meters which is reducing the influx of meters along with the low capacity of local companies.” He urged the customers to join their voices so the federal government can reconsider the high import duty on meters, saying with lower rates, the DisCo will flood the networks with meters.
A customer and metering expert in Abuja, Uche Onum said at the rate of metering target, the local firms do not have capacity to service the 11 DisCos. NERC record shows that about 107 vendors have been given permits as MAP but not all have been engaged by the DisCos.
However, the meter firms have insisted they have capacity to flood the DisCos with meters but that they need financial tools to do that.
The MD of Mojec, Chantelle Abdul said Mojec has partnered with some banks to raise finance schemes.
Some top officials of DisCos told this paper that the financial crisis in the sector was another hurdle. They urge NERC to hasten the implementation of the tariff which could help them raise some cash flow for more investment in meters.
Presently, those who spoke in confidence said, the Minimum Remittance Order (MRO) set by NERC for monthly energy payment remittance to NBET has crippled their fund.
A handful of the DisCos, it was learnt struggled to pay their workers and even delayed salaries for February 2020.
In the meantime, electricity consumers have insisted that meters must be first provided before the implementation. Mrs. Maria Ochube, a commercial customer of Kano DisCo in Tudun Wada area of Kano State expressed dissatisfaction over the revelation.
“If the electricity supply situation has improved, we can bear the new cost, but we must get meters first.’ Isaac Yusuf, who resides in Mararaba town of Nasarawa State under AEDC, said they have applied severally for meters but are not getting any response.
“The federal government must charge the DisCos to provide meters to customers before they increase the tariff by April,” he insisted.
Speaking exclusively to Daily Trust, the President, Nigeria Consumer Protection Network (NCPN), Barrister Kunle Kola Olubiyo urged government to expedite action on metering consumers.
Olubiyo also urged NERC to suspend the tariff hike following the ravaging corona virus pandemic and the restriction of people from workplaces. The National Coordinator, All Electricity Consumers Protection Forum, Mr. Adeola Samuel Ilori insisted that meters must be provided for effective billing and paying for what is used.
“This is because consumers clamouring for meters believe that they are been charged for what they did not use,” he noted.

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