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NERC’s Search For Acceptable Estimated Billing

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The stormy issues of estimated billing continue to take the central stage of discussion in the Nigerian Electricity Supply Industry (NESI). According to the sector regulator, the Nigerian Electricity Regulatory Commission (NERC), practice is responsible for the growing customer apathy to pay their bills leading to huge financial crisis in the sector. FESTUS OKOROMADU writes on NERC’s new search for solutions.

The practice of estimated billing in the Nigerian Electricity Supply Industry (NESI), according to the Nigerian Electricity Regulatory Commission (NERC) has continued to constitute a major source of complaint by customers of all the electricity Distribution Companies (DisCos).

The regulator said its market report on the situation as at August 2018 indicates that six out of every 10 electricity customers in the country are unmetered and therefore, subjected to estimated billing.

The  practice NERC noted has resulted in growing customer apathy to pay their bills leading to huge unsettled DisCo invoices and calls for urgent metering of unmetered customers and timely reading of customer’s post paid meters.

Citing the recent effort of the National Assembly to legislate against the practice of estimated billing, NERC said the move reflects the public concerns relating to the inadequate end-use meters for electricity customers and flagrant abuse of the estimated billing process for both post- paid metered and unmetered customers.

DisCos Breaching The Rules Of Engagement

According to NERC, reports of the monitoring exercises it embarked upon show that the implementation of estimated billing based on the Commission’s applicable regulation has not been strictly complied with by all the DisCos.

Adding that the challenge of implementing the guidelines of the regulations has further been exacerbated by the widespread inadequate metering of distribution transformers and feeders.

This failure, NERC said has placed a considerable burden on unmetered customers who ultimately are exposed to unacceptable level of estimated bills that were, in most circumstances, not objectively determined.

The Commission identified other technical challenges in implementing estimated billing methodology to include the non-integration of billing platforms for the purpose of determining the estimates of energy consumed by customers with prepaid meters and lack of relevant benchmarks and reporting on minimum supply and load shedding data.

Meanwhile, NERC noted that the current metering level of DisCos is a breach of the Performance Agreement executed between the Bureau of Public Enterprises (BPE) and the core investors in the eleven (11) DisCos which provided for the installation of end-use meters based on agreed targets.

NERC further stated that, “The Distribution License Terms and Conditions (Condition 41(2)) provides that ”Electricity supply to a customer should be effected with an operational meter first being installed”. The provision of electric meters to customers prior to electrical connection is further reaffirmed by Section (1) of the Regulation on connection and disconnection procedures with a requirement that … a Distribution Company shall …….. “fit a meter and connect electricity supply in line with the Commission’s customer service standards of performance”.”

Meter Asset Provider Regulation (MAP)

Earlier in the year, NERC in pursuit of eliminating the practice of estimated billing for unmetered customers in the NESI, approved the Meter Asset Provider Regulation (MAP). The main objective MAP according to the Commission is to fast track the roll out of end-use meters for all consumers thus ensuring that customers pay for only what they consume.

According to NERC, the MAP regulation is without prejudice to the obligation of the DisCos to provide specified volume of meters under the terms of the Performance Agreement (PA) executed between the respective core investors and the Federal Government of Nigeria (FGN).

The Search For A Quick Alternative

Bearing in mind that the MAP scheme has an implementation timeline for closing the metering gap as within three (3) years, NERC says there is the need to address the concerns of customers during the transitional period.

Consequently its opening up a new window of opportunity to address the issues. This even as NERC emphasised that Section 31 of the MAP Regulations provide that the Commission shall, within 90 days of coming into effect of the regulation, develop an Order for the capping of estimated bills as a strategy of mitigating the concern of electricity consumers and to further incentivise electricity distribution companies to expedite the provision of meters nationwide.

NERC has therefore embarked on consultation on what it called, “Capping of Estimated Billing for Unmetered Electricity Consumers.”

The Commission listed the objectives of the consultation which is offering stakeholders the opportunity to make paper presentations are as follows:

Solicit for comments from stakeholders on the proposal to set aside the existing regulations on estimated billing methodology; Seek for comments on possible options on the determination of the cap on monthly estimated bills issued to customers taking into account customer classes and other relevant indices.

Meanwhile NERC has proposed three methodology options of capping for stakeholders consideration asking that they freely comment on the options presented in this Consultation Paper

In addition stakeholders are also invited to propose other possible methodologies of capping estimated billing in the NESI.

According to the Commission comments on the Consultation should be submitted to cap.billing@nerc.gov.ng no  later than December 10, 2018.

The over 4.7 million electricity consumers said to be without meters, the civil society alongside other well meaning Nigerians who are concerned about the implementation of estimated billing in the sector, must rise up to this opportunity to make meaningful contribution.



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