6 million households await meters as DisCos braces for new electricity tariff

The new tariff is service reflective, so customer that enjoy premium services are expected to pay higher tariff based on the guaranteed hours of availability and service quality.
Prepaid Meters

Despite unmet metering gaps to more than six million customers/households, some Electricity Distribution Companies (DisCos) have started to warn customers that tariff will increase from July 1, following approval from the regulator and the Nigerian government.

With more than six million Nigerian households already facing expected bills, according to the latest data from the Nigerian Electricity Regulatory Commission (NERC), consumers would have to face increased costs from higher prepaid meter prices over naira devaluation and new electricity tariffs.

According to the quarterly report of NERC for the fourth quarter ( Q4) of 2019, insufficient metering remains a major problem in the sector, with just 3,918,322 (37.77%) of the total customer population of 10,374,597 meters.

In comparison, the number of metering and billing complaints rose dramatically and still dominates consumer complaints during the the period under review, with 23.37 per cent of the 177,807 complaints focusing on metering, while 27.13 per cent are billing.

Huge collection losses due to consumer apathy have posed a significant challenge to the competitiveness and survival of the business, with 62.37 per cent of end-user customers on projected billing.

Last year, NERC launched the Meter Asset Providers (MAPs) policy to bridge the metering gap, but by the end of December 2019, it was only able to achieve 37.7% progress.

The scheme transferred meter costs to customers, but most people, however, who registered and made payment to DisCos and meter licensees, remain unmetered, even after NERC had said they must be metered within 10 working days.

Furthermore, the increase in import duty on meters (from 15% to 45%), bottlenecks at ports, and COVID-19 outbreak could further weaken the plan, particularly with the bulk of meters being imported from China.

In a letter to the DisCos and MAP, NERC stated that the price of single-phase meters is now N44896.17 rather than the previous N36991.50 and that customers applying for three-phase meters will now pay N82855 instead of N67055.

“In arriving at the approved unit costs, the commission has considered the recent changes in foreign exchange approved by the Central Bank and the applicable rates available to importers of meter components and/or fully assembled meters through the ‘Investors and Importers’ forex window,” NERC said.

On the tariff increase, a notice from some Discos shows that from next month the new tariff will be enforced.

Hitherto, the amount had been capped by NERC, better known as estimated bills that can charge unmetered customers by the distribution companies.

According to an order repealing the current billing regulations of 2012, NERC expressed concern that the number of users of electricity rose to more than 10 million within seven years, with approximately 52 per cent being invoiced on projected billing.

NERC observed that the substantial level of consumer frustration arising from unreasonable projected bills also adversely affected industry revenues as a result of customer apathy and a declining willingness to settle invoices in full.

“Following the directive of the Nigerian Electrical Regulatory Commission (NERC), with the approval of the Federal Government, on the planned electricity tariff review which will take effect on July 1, 2020, the Enugu Electricity Distribution Company (EEDC), wishes to notify her esteemed customers of this development,” said a notice from EEDC.

“The Nigerian Electricity Regulatory Commission (NERC) last year approved an average of 30 percent increase in electricity price bands exempting customers with very limited consumption.”
EEDC said the tariff review is necessary since the government cannot fund its subsidy any longer.
“The new tariff is service reflective, so customer that enjoy premium services are expected to pay higher tariff based on the guaranteed hours of availability and service quality.

“However, there will be no tariff increase for those customers that have low level of supply and lower service quality. This is consistent with the feedback received from customers during the stakeholders’ consultations for extraordinary tariff review application organised by EEDC and NERC respectively in February and March this year,” EEDC said.