Report: Despite Numerous FG Schemes, Over 57% Electricity Consumers in Nigeria Still on Estimated Billing

Emmanuel Addeh in Abuja 

Nigeria’s slow progress in metering power consumers in the country has continued, with a new report showing that over 57 per cent of Nigerians still remained in the estimated billing system at the end of December 2022.

The new document: “The 2022 Electricity Market Competition Report”, released by the Nigerian Electricity Regulatory Commission (NERC) also indicated that only 42.25 per cent of the over 12 million Distribution Companies’ (Discos) customers were supplied metering devices at the end of last year.

Despite the several policies and schemes to deepen meter penetration as well billions of naira sunk into procuring the devices, Nigeria still continues to struggle with the challenge of accurately measuring the cost per unit of power consumed by its people. 

Those without meters are therefore placed on estimated billing, which many customers believe is at the whims of the Discos, who bill them randomly. Estimated billing is largely perceived as a non-transparent method of assessing power consumed by customers.

However, the NERC data showed  that about 2,558,617 additional end-use non-Maximum Demand (MD) meters had been installed, post-privatisation in 2013 to December 2022, including the replacement of faulty meters. 

The majority of the meters, it said, were deployed under the schemes – Credited Advanced Payment for Metering Implementation (CAPMI), Meter Assets Provider (MAP) and National Mass Metering Programme (NMMP) – which jointly accounted for 91.79 per cent of the meters installed during the period.

The ratio of metered customers to registered customers population, it added, indicated an average end-use customers’ metering status of 42.25 per cent. 

“Only Ikeja, Eko, Abuja and Benin DisCos had metered more than 50 per cent of their registered customers as at 31st December 2022.

“With 57.25 per cent of the end-use customers on estimated billing, collection losses due to customer apathy pose a serious challenge to the Nigerian Electricity Supply Industry (NESI),” it added.

According to the regulatory agency, in continuation of the efforts to intensify the rollout of meters, the commission had revised the MAP Regulations which provided a framework that allows for a smooth and concurrent implementation of both schemes in order to fast-track meters deployments. 

Following the completion of Phase 0 of the NMMP, with rollout of about 1 million meters, the commission said it had commenced engagement with relevant stakeholders to kick off Phase 1 of the NMMP, designed to get Central Bank financing to Discos to procure 4 million meters from local meter manufacturers and assemblers.

However, THISDAY gathered that that the scheme has now been stalled due to lack of funding from the CBN.

But, despite the failure of that phase, it would appear that the government has now moved on to the next phase after the challenge of funding encountered in phase one.

Last week, the federal government opened the bids for the phase two of the NMMP which is to be funded from a $500 million World Bank loan, with 47 firms, both local and international, submitting bids for the procurement of 1.25 million electricity metering devices.

THISDAY learnt that the supply and installation of the smart meters is expected to be completed within 18 months.

The Special Adviser to President Bola Tinubu on Energy, Olu Verheijen, in her remarks, noted that the federal government was committed to ending electricity estimated billing throughout the country to reflect cost-reflective tariffs.

“The Federal Government of Nigeria is committed to delivering reliable and cleaner electricity to Nigerian people and businesses. We are embarking on reforms that will improve the performance of Distribution Companies (Discos) as we continue our trajectory to cost reflective tariffs.

“In the first step to fulfilling our campaign promise to end estimated billing, we are  launching phase two of the ambitious national mass metering programme. The phase involves procuring 1.2 million pre-paid meters, with the procurement process set to begin this month,” she stated.

The commission in the report , further stated that in pursuit of mitigating the risk of financing outside the electricity market, it made provision for the establishment of a Meter Acquisition Fund in the December 2022 Tariff Order to support the deployment of end-user meters. 

‘’The fund, which is to be administered centrally by a Fund Manager approved by the commission, shall be used as securitisation for long-term financing for meter deployments to fast-track the closure of the end-users metering gap in the NESI,” it added.

Notwithstanding the progress in power generation, NERC noted that the industry constraints relating to inadequate gas supply, transmission constraints, limited distribution network and commercial viability of Discos operation still pose major technical and operational challenges to the industry.

The report added that the current generation capacity remains lower than what is required to meet the estimated load demand of 17,556MWh/h as demand is expected to grow to 45,662MW by 2030. 

But it noted that the reported power generation statistics do not include the off-grid and captive generation capacity. 

The NERC report further stated that rich customers constitute the highest consumers of electricity in the country thus enjoying more of the subsidy provided in the sector.

Besides, it stated that the average price spent on electricity by Nigerians in 2022 was $0.14, per kilowatt and was relatively lower than the average electricity tariff in most West African countries.

The report said households’ connection showed that 79 per cent of the richest group and 68 per cent of the high income group were connected as compared to the poorest and low-income groups with 21 per cent and 41 per cent connection rates respectively.

“The current state of the Nigerian power sector characterised by tariff subsidy, mostly benefits the (relatively) rich as more rich people are connected and consume more electricity,” it said.