Over 3m Electricity Consumers Still Unmetered — Daily Trust Investigation

Image source: Daily Trust

Fluctuating foreign exchange (Forex) regime inadequate funding and poor customer enumerations are straining the metering of 2.9 million registered electricity customers across the country.

Daily Trust on Sunday findings revealed:

A metering status report obtained from the Nigerian Electricity Regulatory Commission (NERC) in April 2016 shows that the 11 distribution companies (DisCos) had 6.160 million registered accounts of customers out of which 3.207 million households have been metered; while About 2.953 million remained unmetered within the period.

The five DisCos in the North comprising Abuja, Kaduna, Jos, Kano and Yola had 1.974 million registered customer base as at December 2015. They had 1.024 million metered customers by March 2016. However, a significant 950,179 customers in the region were unmetered analysis shows.

The six other DisCos in the South comprising Eko, Ikeja, Benin, Ibadan, Port Harcourt and Enugu, had 4.187 million customers with registered accounts. About 2 million of those customers were not metered during the period.

During the privatization in November 2013, the DisCos agreed with the Bureau of Public Enterprises (BPE) and NERC to close the three million metering gap but have not gone beyond 200,000 meters after two years.

Of the 403,255 meters procured since 2013, representing 12% of the registered population after privatization, customers financed the installation of 7.5% (251,531 meters) under the Credited Advance Payment for Metering Initiative (CAPMI). The DisCos financed only 4.5% which is 151,724 meters since they took over.
NERC, after implementing the hiked electricity tariff in February 2016 had ordered the distribution firms to meter all customers within three years rather than the five year duration given in 2015.

The regulator had also threatened to wound up the CAPMI soon, saying the DisCos were relying more on customers to finance metering rather than investing more.

A NERC update indicates that the DisCos must meter all the large power users in their franchise areas this year. Confirming the progress by Abuja DisCo, the Managing Director of KANN Utility firm and major investor in the DisCo, Mr Emmanuel Katepa, said there are 3,500 of such customers under its operations.

“The advantage is that they are only about 3,500 customers and include most commercial users, industries and some government establishments. We are going to meter them by 100 per cent this year,” Mr. Katepa assured.

Sources in the industry have, however, expressed concerns over certain indices which they say may have strained the metering progress.

Top on this they said was the fluctuating foreign exchange (forex) regime. The tumbling of the power grid from the expected 5,000 megawatts (mw) in February to less than 2,000mw which prevailed till July critically cut down forecasted revenue base in the power industry, our reporter learnt.

Spokesperson for the Association of Nigerian Electricity Distributors (ANED), Mr. Sunday Oduntan, had said the interest deductions for the ₦213 billion power sector loan granted by the Central Bank of Nigeria (CBN) has begun despite the poor revenue collection occasioned by low power supply recently.

Most of the DisCos in their presentation of the 2015 Multi Year Tariff Order (MYTO) assured of deploying 100,000 meters yearly to cover their unmetered customers by 2019. But a year into their submission, only a few have massively deployed the meters.
The industry meter report yet to be updated, indicated that none of Ikeja DisCo’s 214,356 unmetered customers was willing to pay for meters under the CAPMI even when the scheme allows customers to pay for meters and get refunded with interest in three years.

The 148,576 unmetered customers for Kano DisCo were reported to have treaded similar pathway, but industry experts believe the account was not true from the firms as many customers would pay for meters to stop the ‘crazy’ estimated billing.
Meters deployment.

At the end of the first half of 2016, some of the firms updated their metering status. Jos and Kano DisCos launched their 120,000 and 73,000 metering scheme respectively.
By deploying 73,000 meters, Kano DisCo reduced its unmetered customer base to 75,500 meters. Jos DisCo is reducing its backlog to 48,644 customers from the 168,644 figure it had earlier.

Kaduna Electric said it was deploying 400,000 smart meters between July 2016 and December 2019.  The DisCo said it deployed 7,000 units in July, 15,000 units this month and in September; 20,000 in October, 21,000 in November and 22,000 by December 2016 to attain 100,000 units.

If the scheme is achieved, the DisCo would have reduced its unmetered customers from 132,158 to 32,158 by December while it strives to register more customers.

In a brief, Abuja DisCo’s former Director of Commercial Services and now Managing Director, Mr. Ernest Mupwaya said 45,000 meters have been installed this year while 70,000 is being deployed. Even at this, the DisCo would still be left with 99,168 unmetered customer backlog.

Yola DisCo has 191,507 unmetered customers. The News Agency of Nigeria (NAN) recently reported that its Managing Director, Mr Baba Mustapha said 76,000 meters will be deployed this year; it had supplied 6,000 units already, the report noted.

Enugu DisCo which has 732,423 customers has not metered 512,335 of its customers. The DisCo in a statement by its spokesman, Emeka Ezeh promised deploying 200,000 meters. NERC scolded it in July for allowing such a huge metering gap.
Managing Director of Benin DisCo, Funke Osibodu at the seventh power sector meeting in Benin said the firm deployed 25,000 meters this year with over 120,000 meters installed since it took over in 2013.

Eko DisCo’s Chief Operating Officer, Sam Uwaire was reported to have said the firm installed 96,200 meters since 2013.

Funding hurdles

Although some of the distribution firms may have made significant progress, a source from Abuja DisCo said the firms are battling with Forex differentials.

He said most of the meters are imported and that the cost of a dollar to the naira may have affected the import quantity.

An independent analysis shows that even with the propositions of deploying 100,000 meters annually, lack of funding could be a bane.

This is because despite the huge backlog, many DisCos have yet to do a proper customer enumeration to add their recent customers to the list just as the figures keep rising.
While the National Bureau of Statistics (NBS) identified over 20 million electricity users, the 11 DisCos have barely registered six million, marking a clear setback on energy theft and poor accountability for the industry.

Mr Oduntan in a briefing last month said customer enumeration by DisCos to determine unregistered customers requires funds running into billions of naira. This could be a hurdle when their revenue base has declined due to the fall in power generation.
In his comment, an energy economist and consultant, Mr. Peter Anthony Okoh, said while NERC has banned DisCos from connecting new households without meters, many of the firms have actually continued to connect new houses secretly, without meters.
On the meter financing challenges, Mr. Okoh said the distribution firms may have difficulty paying for all the meters they require at the prevailing dollar exchange rate mostly for imports. He noted that it could be the cause for many customers who have paid for meters (CAPMI) for months without having them.

“Customers who want meters pay ₦24,832 for a single phase meter, and ₦53,820 for three phase meters under CAPMI.

“To deploy 100,000 meters of such, the DisCos will spend over ₦2.484 billion and ₦5.383 billion respectively but that could be higher if they are importing and the logistics to install them at the dispersed homes.

“This is a quite a huge fund for firms who are still struggling with effect of vandals’ activity, poor collection losses and their inability to reduce the Aggregate Technical, Commercial and Collection (ATC&C) losses,” Mr. Okoh explained.

He noted that the rates for meter payment under CAPMI scheme are unchanged but the DisCos have to incur additional cost in ensuring the meters are provided within 60 days. “With these issues, the DisCos may not be doing much on metering many customers now, maybe until their revenue collection improves,” Mr. Okoh added.

President of the Power Consumers Advocacy Network, Mr. Kunle Olubiyo told Daily Trust that most DisCos complained of not making profit and that it has a huge effect on their investment stand.

“These companies said they had technical partners when they took over but most of them are gone; with the loss declarations they made, not obvious investments may have been made in their networks,” he said.

Mr. Olubiyo, however, urged the federal government to do a forensic audit on the 11 DisCos to evaluate how much they collect as returns on electricity supply and their investment needs.