The Nigerian Electricity Regulatory Commission (NERC) has announced the approval of N21 billion for 11 electricity Distribution Companies (DisCos) to provide meters for customers.
Daily News 24 reports that the announcement was made in NERC’s ORDER NO: NERC/2024/072 on “The Operationalisation of ‘Tranche A’ of the Presidential Metering Initiative Under the Framework of Meter Acquisition Fund.”
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The order, signed by NERC Chairman Mr. Sanusi Garba and Commissioner Legal Dafe Akpeneye, will take effect from June 2024 and may be amended or revoked by subsequent orders from the commission.
“The commission hereby approves the sum of N21 billion apportioned pro rata to contribution by the DisCos as Tranche A of the MAF scheme. Attached to this order as Schedule 1 is a breakdown of the funds available for each DisCo for the purchase of end-use customer meters. All the meters to be procured and installed under the MAF framework shall be at no cost to the customers of the DisCos,” it said.
NERC introduced the Meter Asset Provider (MAP) Regulations in 2018 and the Meter Asset Provider and National Mass Metering (MAP&NMMR) Regulations in 2021 to address metering challenges in the Nigerian Electricity Supply Industry (NESI). However, despite significant interventions, the national metering gap remains over seven million customers.
“The inability of distribution companies (DisCos) to raise financing in the form of debt or additional equity was identified as the major constraint in the acquisition and deployment of end-use meters and other capital investments. The Meter Acquisition Fund (MAF) scheme was therefore developed and approved by the commission, primarily to address the challenges of DisCos creditworthiness inhibiting the deployment of end-use meters in NESI,” it said.
The federal government approved the Presidential Metering Initiative (PMI) with the objective of closing the metering gap in the NESI within three years, leveraging smart metering technologies for data analytics.
The MAF will form one of the revenue streams for repaying long-term financing for metering.
The order also revealed that the commission approved the deregulation of meter prices under the MAP scheme to ensure efficient pricing of meters and quicker responses to changes in macroeconomic parameters.
“A competitive bidding process was held on May 21, 2024, where 24 MAPs participated across the 12 DisCos. A total of 44 bids were submitted for 10 meters specifications,” it said.
The deployment of funds under the MAF scheme is expected to accelerate meter deployment and reduce the current metering gap, thereby reducing commercial and collection losses for DisCos and improving customer satisfaction.
NERC emphasized the need to close the metering gap for all customers currently classified under tariff Band A for revenue protection and demand side management.
DisCos are required to utilize the first tranche of disbursement from the MAF scheme based on contributions made as of the April 2024 market settlement.
DisCos must conduct a transparent and competitive procurement process for meter price determination and selection of MAPs/LMMAs within 14 days from the order’s effective date and report the details to the commission within 20 days for approval.
“The commission said that where an Advance Payment Guarantee (APG) issued by a commercial bank in the country is provided by a qualifying MAP/LMMA, 30 per cent of the contract sum shall be paid by the FM on behalf of the DisCo to the MAP/LMMA upon execution of the contract. Further milestone payments shall be made upon completion of 60 per cent and 100 per cent of contracted quantities respectively, with funds advanced against bank guarantee amortized over the payments,” it said.
NERC mandated DisCos to ensure that all necessary resources and network clearance required by the MAP/LMMA to install meters are provided or completed.
