New challenges in deploying meters to consumers

Prepaid meters

Beyond availability and willingness to deploy new meters to consumers by electricity distribution companies (Discos), many households are refusing to embrace smart meters over fear they may be trapped in overpriced energy deals arising from calibration and tampering by manufacturers that may be colluding with Discos. Head, Energy and Solid Minerals desk, FEMI ADEKOYA writes about the multiple failing in the deployment of meters and challenges ahead.

Metering represents the foundation for sustainable revenue generation and commercial viability of the electricity sector.

With electricity as the product offering, DisCos must accurately account for inflows of electricity into their network and outflows of electricity delivered to customers.

Due to short supply of new pre-paid meters to consumers, Discos have had to depend on estimated billing to fill the revenue gap created through the scarcity.

Deploying the estimated billing approach has led to many protests by consumers, who described the practice as making the power firms profiteer without adding value to their services.

Many have argued that estimated billing ensures that electricity consumers are deliberately left unmetered so that, at monthly intervals, they can be slapped with outrageous bills that have no bearing whatsoever on the quality or quantity of electricity supplied or consumed.

With the recent passage by the House of Representatives of a bill criminalising estimated billing, many are optimistic that the legislative intervention in the country’s troubled power sector might be of help to over-burdened consumers.

Metering consumers enables the Discos to provide an assurance of fair billing and payments to and from suppliers and customers alike.

The implication is that metering must be a top priority for DisCos and the entire power sector value chain whose respective costs of service are all embedded in the final utility bill borne by the customer.

Essentially, the power sector value chain is wholly dependent on the DisCos providing last mile services to the customer and perform the role of revenue collectors.

Figures from the Nigerian Electricity Management Services put the metering gap in the country at 5,323,433 from a customer base of 8,914,601.

This means that only 3,591,168 customers have been supplied with prepaid meters since the ownership of the Power Holding Company of Nigeria changed hands in 2013.

What the regulation says
The Electric Power Sector Reform Act (2005), mandates NERC to, among other things, create, promote and preserve efficient industry and market structures and to ensure the optimal utilisation of resources for the provision of electricity.

The Act further mandates the Commission to ensure that prices charged for electricity are fair to consumers while allowing the utility to recover efficient costs, and earn a reasonable return on investment.

Essentially, the Electricity Power Reform Act (Amendment Bill) 2018, will make it a crime for power distribution firms to persist in their practice of foisting on Nigerians “crazy” bills based on estimates and arbitrariness.

It will also be contrary to the law for DisCos to disconnect a customer who has not been provided a meter after 30 days of duly applying for it; as different fines and prison terms have been spelt out for failure to comply with the provisions of the new law, including a one-year jail term and N1 million fine for defaulters.

In checking the practice of estimated billing for unmetered customers in the Nigerian Electricity Supply Industry (NESI), the Commission approved the Meter Asset Provider Regulation (MAP), with the main objective of fast-tracking the rollout of end-use meters for all consumers thus ensuring that customers pay for only what they consume.

The implementation timeline for closing the metering gap is within three years, hence the need to address the concerns of customers during the transitional period.

The MAP regulation is without prejudice to the obligation of the DisCos to provide specified volume of meters under the terms of the Performance Agreement (PA) executed between the respective core investors and the Federal Government of Nigeria.

Section 31 of the MAP regulations provides that the commission shall, within 90 days of coming into effect of the regulation, develop an order for the capping of estimated bills as a strategy of mitigating the concern of electricity consumers and to further incentivise electricity distribution companies to expedite the provision of meters nationwide.

Why are consumers worried about smart meters?
With the deployment of smart meters to some consumers to cover the demand gap, there are concerns that Discos are indirectly making moves to increase their profits by rolling out meters that are calibrated to read faster, thereby increasing the procurement of units by consumers.

Nigerian Electricity Management Services Agency (NEMSA), however believes in educating customers about how smart metering operates and can be beneficial for them considering the transition from estimated billing.

Managing Director of NEMSA, Peter Ewesor, noted that the agency is responsible for ensuring that meters that are used in the country meet the required standards and accuracy, adding that NEMSA has three stages for dealing with that and the first step is to prove the efficacy of the meter that is coming for the first time.

“The manufacturer or the supplier that is going to bring in meter to Nigeria for the first time must carry out what we call the Type test that is used to actually determine if the meter would work in our environment.

“Our temperature is high and our environmental conditions are not the same with Asia and America. When we test the meter, we check the temperature, accuracy, humidity, components and the fire resistance. It is after this that we issue the type test certification for them so that the supplier can bring in these meters in large quantities into Nigeria. A routine test is also conducted before the meters are deployed for consumers’ use. The routine test is to confirm if the meter he is bringing in is exactly what was approved in the Type test”, he explained.

On the poor calibration of the meters, Ewesor said a meter could read fast if the meter is bad as a result of factory fault, the earthing of a building and other factors.

“The greatest challenge in Nigeria is that we do not know how to do proper power management, as a lot of consumers are still utilising energy as if they are under estimated billing, and that makes the meters read faster. When you do not need light in your house, you do not have to put it on; and when you are going out of the house in the morning to work or any other place, you should try to switch off the lights.

“A few of the issues raised by consumers might be genuine while some might not be due to all those facts and figures I have raised and we have told Nigerians that if you want to know a meter that has not been tested by NEMSA, you will look for what we call a seal from NEMSA, because the seal is the only guarantee to show that the meter has been tested.

“If you do not see that NEMSA seal or the test label, then the consumer can then complain to NEMSA, and through the Disco go and find out what has happened. Some instances could be the way they have installed the meters. Meters have other components that support the efficiency and functions of the meter, so those are the scenarios”, he explained further.

Way forward
To achieve a successful metering programme, PwC emphasised the need for strong alignment and integration of all the programme activities and operational functions with overlapping responsibilities and critical dependencies to ensure that the strategic objectives for the metering program are met.

PwC added that to achieve the required alignment and integration, the DisCos must establish a centralised Strategic Program Management Office (“SPMO”) at the start of its comprehensive metering program – from conceptualization through to execution.

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