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NERC reverses self, says Pre-paid meters no longer free

By The Citizen
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The Nigerian Electricity Regulatory Commission (NERC) has amended its earlier directive that electricity consumers should not pay for pre-paid meters. Instead, the commission said Wednesday that those customers who were yet to get the pre-paid meters and who were still receiving 'crazy estimated bills' were at liberty to pay for meters to enable them control their electricity consumption.

NERC also promised to make electricity distribution companies  (DISCOs) to meter all customers who had previously paid for meters pre-July 1, 2012 and were yet to receive them within 45 days. Punitive action has also been rolled out for distribution companies  which fail to  obey this new directive.

The Guardian had disclosed in an exclusive cover report last December that the government's plans of metering all customers within 18 months was under threat because of an alleged diversion of N46 billion MYTO 2 fund to settling historical debts of the Power Holding Company of Nigeria (PHCN).

And amid clamour for the review of the new electricity tariff, NERC is also to hold a public hearing for small and medium enterprises and other stakeholders to contribute to arriving at a more affordable fixed charge in order to ensure the sustenance and growth of the sector.

The Chairman of NERC, Sam Amadi, who addressed a press briefing on the revision of the earlier free meter directive, stressed that any customer who wishes to pay for the meter now would be compensated over time. In return for paid meters, such customers would get energy credit and reduction in their fixed charges over time.

Amadi said:   'Willing customers can advance money to the distribution companies after which a meter will be installed on their premises within a stipulated time frame. In exchange for this advance, the DISCOs will in turn, reduce the customer's electricity bills on a monthly basis to the tune of the amount originally advanced by the customers.'

He said the commission would accredit meter vendors to supply and install meters directly to customers.

He gave further insight into why the commission had to amend the initial directive.

His words:  'In June 2012, the Nigerian Electricity Regulatory Commission announced that the Multi Year Tariff Order (MYTO 2) provided sufficient funds to provide meters and that customers were no longer required to purchase same. To that end, an 18-month deadline was given to the electricity distribution companies to close the metering gap and ensure that customers are provided with meters.

'Seven months after the pronouncement, there is unacceptable number of electricity customers who are without meters. Compounding the issue is the menace of unrealistic estimated bills or 'crazy bills'. This has compelled the commission to explore alternative ways of ensuring the quicker deployment of electricity meters to customers. Meetings have been scheduled with Chief Executive Officers (CEOs) of the DISCOs with the aim of finding solutions to the metering issue, outcomes of which will be communicated as soon as possible.'

He went on:  'The commission had made a pronouncement that meters were free and customers were no longer required to pay for them as cost was being recovered through the electricity tariff. The recovery is done through the payment of the fixed charge. A portion of the fixed charges goes towards a fund for the purchase of meters by electricity distribution companies. The MYTO 2 was designed to allow for, amongst others, the accumulation of sufficient funds for the DISCOs to carry out a comprehensive meter rollout programme. Unfortunately, the revenues that were projected have not been sufficient partly due to increases in operating expenditure (OPEX) -particularly staff salaries.

'Consequently, majority of retail customers are still not metered. There is also a high level of dissatisfaction with the current way and manner customers are being billed by the electricity distribution companies, and these customers have made innumerable complaints.'

Meanwhile, an Electricity Offences Act is currently being fine-tuned by the NERC and other stakeholders.  According to Amadi,  the law is part of the post-privatization instruments to ensure that new plant owners and consumers adhere to laid down rules.

Stressing that the rule would also deal with anybody who tampers with electricity facilities, the NERC chief noted that the law would pass through the relevant authorities and the National Assembly before becoming law.