Nigeria’s meter outsourcing plan looks good only on paper

In the new metering policy set to be unveiled this month, electricity customers will have the option of buying electricity meters from different licensed distributors and may eventually have the option of porting from one electricity distribution company (DisCo) to another, according to Babatunde Fashola, minister of power, works and housing.

At the power sector dialogue organised by the Lagos Chamber of Commerce and Industry (LCCI) in Lagos last week, Fashola unveiled his vision for the power sector that speaks to a deregulated meter market which is supposed to set in competition as meter manufacturers and resellers will have the opportunity to compete in a free market.

The minster reiterated what he had earlier said at a meeting with operators in the power sector that the distribution of meters was not the exclusive preserve of DisCos. Fashola said government will not oppose the wishes of electricity customers that are willing to pay for meters from their DisCos, based on agreement between both parties, endorsed by the Nigerian Electricity Regulatory Commission, (NERC).

Meter supply in Nigeria has been contentious since the power sector privatisation programme in 2013. The Federal Government missed an opportunity to enforce regulation that compels DisCos to meter their customers and started to allow needless concessions. This encouraged bad behaviour as the DisCos, motivated by huge revenue from estimated billing, discarded their obligation to meter their customers.

According to details from the NERC website, Nigeria’s eleven DisCos have yet to meter up to 15 percent of their customers four years into the privatisation programme. NERC merely directed them to provide meters for maximum demand customers leaving large swaths of the Nigerian population at the mercy of the DisCos.

A half-hearted effort at remediation led to the introduction of the Credit Advance Payment for Metering Initiative (CAPMI) by the NERC, a policy that allows electricity consumers contribute towards defraying the cost of meter supply. However, the DisCos soon abused the initiative, collecting advance meter payments from customers and failing to supply them meters. Fashola abolished the policy last year, and like the previous government, failed to sanction erring DisCos.

Now the minister is directing customers to enter into private negotiations with their DisCos for the supply of meters. Meter policy flip flop is the result of a regulator who has failed to hold the DisCos to account for bad behaviour. In Ghana huts and hamlets all have meters supplied by the power companies. It is a basic requirement for the power companies to provide meters but that is not the case in Nigeria, where the people are victims of a perversely corrupt system.   

While the minister keeps making pronouncements, the DisCos have kept a studied silence preferring to allow the minster have his say, well assured it would take more than bluster to compel their buy-in. In reality, it is impossible to buy your own meter and demand a DisCo to supply power to it.

The minister’s plan while on the face of it sounds all good and dandy, it is impractical and unrealistic and the DisCos know it. There is no part of the world where electricity consumers supply their own meters regardless of how the minister creatively interprets the provision of the Electric Power Sector Act. You cannot compel a customer buying fuel from a petrol station to provide his own meter any more than you can an electricity customer.

The absurd practice of customers paying for their own meters became an option as a way out of the burden of scandalous estimated bills. Without protection from NERC, seen as a weak regulator, DisCos will soon abuse this plan. The DisCos do not pay the other players across the value chain what is due because they have failed to improve collections, the regulator should apply the law rather than passing the problem off to customers.

ISAAC ANYAOGU