MAP: Entrenching Transparent Electricity Billing For Customers
Transparency is gradually returning to the electricity industry with government settling for Meter Asset Provider regime. This regulation by the calculation of the Nigerian Electricity Regulatory Commission (NERC), will help bridge estimated five million meter gap in the country, writes, Leadership.ng
Electricity consumers in the country are looking with enthusiasm to the implementation of the Meter Asset Provider, (MAP) regulation by the electricity industry regulator, the Nigerian Electricity Regulatory Commission (NERC).
The implementation of the scheme which will kick off from May 1, 2019 appears as a relief to several millions of unmetered consumers, who since the privatisation exercise of the sector, pay for more than what they consume through estimated billing by the Distribution Companies (Discos).
Defrauding Customers Via Estimated Billing
The practice has generated so much disaffection, protests and demand for scrapping of the estimated billing practice. Expectations are high as the MAP is intended to bring an end to the monopoly once enjoyed by Discos, in providing meters. The new regulation will also halt the several years of untold hardship customers face with estimated billing.
The MAP, according to NERC, is aimed at eliminating estimated billing and its attendant challenges in the Nigerian Electricity Supply Industry (NESI), while also targeting to close the metering gap over the next three years. The Discos on their part have had difficulty in meeting the responsibility of metering customers which they see as capital intensive.
Minister of Power, Works and Housing, Mr Babatunde Fashola estimates that the 11 Discos in the country would require about N220 billion to provide prepaid meter to power consumers. While the Discos grumble over inability to fund meter roll out, consumers continue to pay for the inefficiencies of the Discos by paying about N3 billion monthly in estimated billing as a result of the absence of a robust metering plan.
The situation is further compounded by liquidity challenges and difficulties in accessing credit lifeline from banks to purchase meters, however, today there seems to be a ray of hope for the 11 Discos under the MAP which will save them the stress of seeking for funds to carry out metering programme for about million unmetered consumers.
Understanding MAP Regulations
The MAP regulation was initiated by government after several failed attempts to ensure that electricity customers only pay for what they consume. The regulation provides for the supply, installation and maintenance of end-user meters by other parties approved by the Commission.
Dr Usman Abba Arabi, head, Public Affairs Department at NERC, has at various times offered explanations to the MAP regulation. The regulation, he said, is expected to fast-track the closure of the metering gap and encourage the development of independent and competitive meter services in the sector.
According to NERC, the Meter Asset Provider (MAP) Regulation (Regulation No. NERC/R/112), which was originally scheduled to takeoff on April 3, 2018, introduces meter asset providers as a new set of service providers in NESI. As assets with a technically useful life of 10-15 years, the regulation provides for the third-party financing of meters, under a permit issued by the Commission and amortisation over a 10 year-period.
Although, there are various conflicting figures on existing metering gap, but NERC in its disclosure said the 11 Discos in the power market have a collective customer base of 8,292,840, but have only been able to provide meters for 3,591,168, while 4,701,672 have not been metered as at August 2018.
In its explanation of the development, NERC stated that the percentage of unmetered customers in the market was 57, stating that the practice of estimated billing by the Discos has continued to fuel payment apathy amongst consumers.
Ascendancy of MAP
The Discos, according to their licencing terms and conditions, are compelled to achieve their metering targets as set by the Commission under the new regulation. The contracting of Meter Asset Providers (MAP) shall be through an open, transparent and competitive bid process thus ensuring that meters are provided at a least cost to electricity customers.
The NERC has also made it clear that there are no free meters even under the current tariff regime as all customers, including those on estimated billing, currently pay for a return on the investment made by Discos on meters in their networks.
LEADERSHIP Sunday reports that under the new MAP regulation, customer classes shall be amended to ensure that customers only pay for meters when a meter is physically installed in their premises, while electricity bill of customers provided with a meter under the new regulatory framework shall comprise two parts – energy charge and metering service charge.
The payment of metering service charge will be removed from the customer’s electricity bill upon the full amortisation of the meter asset over its useful life. All faulty meters are expected to be repaired or replaced free of charge within two working days, except in instances where it is established that the customer is responsible for the damaged meter.
In pursuit of promoting local content, the new MAP regulation mandates the investors to acquire a minimum of 30 per cent of their metering volume from indigenous meter manufacturers. This local content threshold may be adjusted by the commission from time to time in line with the verified manufacturing volume of local manufacturers.
The NERC also explained that the 11 Discos are expected to, within 120 days from the effective date of the regulation, engage the services of MAPs towards the achievement of their three-year metering targets prescribed by the commission.
The performance of Meter Service Providers shall be governed by the provisions of the Meter Asset Provider Regulation, technical codes of the electricity industry, and a Meter Services Agreement/Service Level Agreement signed with the Discos, according to NERC.
Local Meter Manufacturers Kick-start Funding Exercise
MAP regulation is not only about ending estimated billing and entrenching transparency but a process of enhancing local capacity in metering manufacturing. The policy expects indigenous meter producers to close 30 per cent local content gap in the supply of meters to Discos.
In what could best be described as a major step ahead of the commencement of the much anticipated Meter Asset Providers (MAP) scheme approved by NERC, Mojec Meter Assets Management Company, a subsidiary of Mojec International Limited, has announced partnership with some leading banks in Nigeria to provide retail financing for electricity customers as the company is set to roll out prepaid meters within the coverage area of its partner DisCos across the country.
The financing deal was consummated at a stakeholders’ forum and Memorandum of Understanding signing ceremony held on Monday in Lagos between Mojec and the partner banks which includes Polaris Bank, First Bank, Wema Bank, Unity Bank, Keystone Bank, Zenith Bank, Sterling Bank and First Option Micro Finance Bank.
Managing director/chief executive officer, Mojec International Limited, Ms. Chantelle Abdul at the forum expressed determination of the company to bridge the metering gap in the power sector by ensuring provision of top quality electricity meters to customers in Nigeria.
‘’Now that MAP is here, Mojec is once again blazing the trail in the provision of high-end quality pre-paid meters to customers, helping to reduce the financial burden estimated electricity billing is putting on electricity consumers,” Abdul said noting that Mojec as a company has invested a lot of resources positioning it as best suited to meet the metering needs of all customers within the coverage of its partner DISCOs.
She further explained that Mojec would be partnering with eight Discos including, Ikeja Electric, Eko DisCo, Abuja DisCo, Kano DisCo, Enugu DisCo, Jos DisCo, Ibadan DisCo and Kaduna DisCo covering about 20 states of the federation.
Chairman/CEO of Nigerian Electricity Regulatory Commission, NERC, Professor James Momoh, commended Mojec for its leadership in the metering sector in Nigeria as demonstrated by its efforts towards the full scale implementation of the MAP Scheme which allows all customers easy and direct access to meter assets.
‘’This MoU signing between Mojec and these banks today as well as the announcement of the company’s readiness to implement the MAP Scheme is very commendable. It goes to show that Mojec is a real leader in this business and its commitment to industry’s mission of ensuring every household in this country is metered,’’ Momoh said.
Why Banks Are Supporting MAP
Chief executive officer of Polaris Bank, Tokunbo Abiru expressed delight in the partnership with Mojec by providing financing support to customers on the meter acquisition scheme. “Our bank is glad to be facilitating the acquisition of these meters by granting loans to eligible customers under the Programme,” he said.
Acting chief executive officer, Keystone Bank, Abubakar Sule, while explaining the importance of energy to the growth of businesses and for the livelihood of homes in Nigeria, noted that energy cost is by all standards the major cost line in most homes and businesses.
“The scheme is set to eradicate the unnecessary prevalence of estimated billing which deprived the national economy of funds which otherwise could be deployed into other productive use. We are therefore excited to be part of this initiative to bring electricity to homes and businesses at the most prudent cost, putting households and business in control of their expenditure pattern”, he said.
Similarly, managing director of Unity Bank Plc, Tomi Somefun explained that this new development reinforces the long standing mutually beneficial relationship and business commitment it had maintained with Mojec International Limited for well over two decades, adding that “the partnership will create beneficial impact on electricity customers, further drive financial inclusion through consumer banking, restore customer’s confidence, increase transparency and thereby replacing the opaque estimated billing system that had prevailed.”
Divisional head, Retail and Consumer Banking, Sterling Bank, Shina Atilola represented by Ayodele Odulaja, head of Power and Telecoms Team also stated, “We are excited to be a key driver of the pre-paid meter acquisition programme which will eliminate the inefficiencies associated with estimated billing and inaccurate post-paid meter readings.
“Leveraging technology, Sterling Bank is reputed for providing Nigerians with a convenient way to access loans ranging from N10,000 to N5 million in five minutes through the Specta online lending platform. Electricity consumers will benefit from the speed of this solution under this partnership without the attendant delays of traditional lending.”
Also, managing director, Wema Bank, Ademola Adebise noted the partnership with MOJEC is proof of the bank’s commitment to provide simple and easy retail financing for Nigerians. “As a bank that takes pride in applying innovative solutions to societal challenges, we are proud and excited to work with MOJEC in meeting the demands of equitable electricity metering in the country. This is a reflection of our cant’s stop, won’t stop drive to create avenues that will support Nigerians to achieve their future dreams today.”
Also speaking, managing director, First Option Micro Finance Bank, Godfrey Ogbuehi stated that “the MAP project resonates so much with the company’s goal of enhancing lives and in response, a new product Light-Up Loan (Prepaid Meter Acquisition Loan) has beenstrategically created to provide fundingto help energy consumers (both individual and businesses) especially thelow income earners and rural dwellers; acquire prepaid meters with ease under the Meter Asset Provider Regulations.”
Single Digit Credit Line by CBN Needed
Apart from commercial banks interest in providing financing to boost the implementation of MAP, chairman, Momas Electricity Meters Manufacturing Limited (MEMMCOL), Mr Kola Balogun, said single digit credit line by the Central Bank of Nigeria, CBN, will facilitate easy access to funds by meter manufacturers for the effective actualisation of Meter Assets Providers (MAP) programme.
Balogun, explained that funding constraint remains a headache major towards the successful implementation and execution of MAP as the project capital outlay is very huge.
He, therefore proposed that the CBN should provide credit facilities to the tune of N10 billion to N20 billion for each manufacturer, stressing that while most meter manufacturers, including MEMMCOL, are already positioned for the execution of the MAP programme in partnership with the DISCOs, they would require a high level of support from government and the CBN, to be able to deliver on the extent of volume of meters to be deploying.
Seeming Challenges Of MAP
Procedural lapses is seen as a challenge to the timing of the roll out date of the MAP as observed by chairman of Momas Electricity Meter Manufacturing Company Ltd, Kola Balogun. He said that NERC did not consider that local meter manufacturers requires ample time to study the meter specifications to enable them produce to standards.
Balogun, said that rolling out meters by May 1 as directed by the NERC was not achievable, considering other challenges that require attention.
On April 5, NERC issued permits to Meter Asset Providers (MAP) to roll out new meters not later than May 1, 2019, but Balogun, argues that, in the first instance, consumers need to be educated about what is expected of them to have access to MAP licencee. “Secondly, consumers have to be informed on the methods of acquiring meters, whether by payment or by investment.
“Lastly, every manufacturer (licencee) that wants to roll out meters needs a grace of three months to enable them have the meters available in their warehouses. The modality to start rolling out meters has to be put in place viz-a-viz all the various documentations that are required and the infrastructure that will make deployment a smooth running”, he said.
Balogun said, “If we are licenced this month (April), three months are enough for us to prepare, that is April, May and June; while in July, we start implementation. “Except for few numbers of us who have some stock at hand that can roll out, the modality to roll out is also a question.
“Apart from NERC giving licences, we still need processes to be put in place before meters will get to consumers because we need to train the meter installers, they need to be adequately trained on installation in consumers’ premises. Consumers also need to be educated on payments, there will also be an “Escrow account’’ in the process.
“These are challenges that require a long period. While that one is going on, anybody who wants to place an order from manufactures will also be signing a contract agreement for the meters. “Those who want to import will also be making orders for importations,’’ Balogun explained.
The Cost Of Prepaid Meters
NERC has fixed the maximum amount of N36,991.50 as charges the acquisition of a single phase meter and N67,055.85 for three phase meters under its new Meter Asset Providers (MAPs) initiative. The amount according to NERC was inclusive of supply, installation, maintenance and replacement of meters over its technical life.
The Commission has in preparation for the roll out issued permits to Meter Asset Providers (MAPs) to four companies now appointed to provide meters to customers of Abuja Electricity Distribution Company Plc (AEDC) and Jos Electricity Distribution Company Plc (JEDC) in accordance to MAP regulations. According NERC, the issuance of permits to the companies was in compliance with section 4(3) of the MAP Regulations 2018.
A statement issued by NERC’s general manager, Public Affairs Department, Dr. Usman Abba Arabi, said newly- licensed meter providers were expected to commence operations from May 1, 2019. According to him, a total of 1.4 million customers would be metered by the licenced MAP operators under the two DisCos with 900,000 and 500,000 of AEDC and JEDC respectively getting covered under the scheme.
AEDC appointed three companies namely, Mojec International Limited, Meron Consortium and Turbo Engineering Limited to provide 487,000, 213,000 and 200,000 meters respectively while JEDC appointed the Triple 7 and Mojec International Limited consortium to provide 500,000 meters.
On their commencement of operations, Arabi said, customers of AEDC and JEDC should expect from the commencement of rollout date for meters to be installed in their premises within 10 working days of making payment to MAPs in accordance with section 18 (3) of the MAP Regulations 2018.
SOURCE: leadership.ng
