Close Metering Gap To Boost Power Sector Liquidity, NERC Charges Distribution Firms

The Nigerian Electricity Regulatory Commission (NERC) has charged power distribution companies (DisCos)’s investors and owners to close the metering gap in the Nigerian Electricity Supply Industry (NESI) to resolve the liquidity challenges bedevilling the sector.

Chairman of NERC, Sanusi Garba, who gave this charge in Lagos, yesterday, emphasised that without adequate metering, the issue of liquidity will not be resolved.

In a series of posts on the power sector regulator’s official X handle, NERC said it held a meeting with Investors/Owners of DisCos in Lagos.

Data from NERC indicates that while the registered customers rose to 13,162,572 in December 2023,

only 5,842,726 customers are metered with 7,319,846 billed on estimated billings.

Garba said, “We cannot overlook the value of metering in the value chain, and we will continue to focus on how to close the gap because customers do not want to pay on the basis of estimated bills.”

“Metering is an issue. Without metering, the issue of liquidity will not be resolved. Customers want to pay for what they consume. It is the single most prevalent complaint of consumers…”

Another tweet attributed to the team lead (Power), Office of the SA Energy to the President, Eriye Onagoruwa, said, “There is a huge metering gap that needs to be bridged. The Presidential Metering Initiative (PMI) is looking at bulk procurement of smart meters, developing homegrown systems of MDMS, reduction of ATC&C losses to globally accepted standards and Stakeholder engagement to identify challenges facing the sector while carrying metering manufacturers along without compromising on cost, quality, and delivery.”

In a related development, NERC announced plans to sanction Electricity Distribution Companies (DisCos) failing to meet stipulated performance standards, in a move aimed at addressing persistent power outages across the country.

In a series of posts on the power sector regulator’s official X handle, Musiliu Useni, vice chairman of the NERC, urged DisCos to improve their performance or suffer consequences.

He was quoted as saying, “NERC will look at performance on a case-by-case basis. Sanctions and actions will not be the same. Ensure that you (DisCos) improve your efficiency.

“If your efficiency is at the level expected, you will get your full OPEX (operating expenditure). If you don’t perform, you will only get 50 per cent of your admin OPEX.”

NERC, as the regulator of the power sector, has the power to approve the operating expenditures of DisCos and other key operators in the industry, and it has been doing this over the years.

Speaking on the operationalisation of ministries, departments and agencies centralised billing platform, Useni told his audience that this was being handled by the finance ministry.

“A payment system was put in place for critical MDAs, with an agreement for the central settlement of their electricity consumption by the Ministry of Finance, which would have access to their meter readings,” he stated.

He further noted that the sector must be run sustainably in terms of payment obligations by various operators.

“We need to ensure that sustainable payment going forward is in place. Market rules are clear, but they don’t envisage there would be tariff shortfall or subsidy,” Useni stated.

The commission stated that the meeting was expected to provide strategic direction for the NESI, review compliance since the last meeting, and give licensees a platform to discuss issues.

Also speaking at the meeting, Chidi Ike, the commissioner, engineering, performance and monitoring at NERC, said the responsibilities of licensees in the NESI shall be examined.

“We are planning to organise a comprehensive workshop for licensees to examine their responsibilities. The workshop will cover the legal framework, grid code, HSE (health, safety and environment), and everything they need to know, following which there will be sanctions for non-compliance,” he stated.

He expressed worry over the construction of houses under transmission lines and warned DisCos to desist from supplying such structures with power.

“You see swathes of communities under transmission lines. Discos supply power to them despite them being in clear contravention of the Right of Way of TCN. We are going to focus on those areas and make sure that Discos aren’t going to benefit from any form of illegality,” Ike stated.

On his part, John Joseph, the assistant general manager, engineering, performance and monitoring at NERC, highlighted the leading cause of accidents during his presentation on the health and safety performance of the NESI in 2022 and 2023.