The Nigerian Electricity Regulatory Commission (NERC) approved N21 billion for electricity distribution companies (DisCos) on Friday to procure meters for customers.
This funding, sourced from the Meter Acquisition Fund (MAF), aims to address the significant metering gap in the Nigerian Electricity Supply Industry (NESI).
According to NERC data, only 44.67% of the 13.4 million registered customers had electricity meters as of April 2024. The MAF, part of the Multi-Year Tariff Order, determines the tariffs customers pay.
NERC’s Chairman, Engr. Sanusi Garba, and Commissioner for Legal, Dale Akpeneye, attributed the low metering rate to DisCos’ inability to secure financing from lenders.
They stated, “The deployment of funds under the MAF scheme shall accelerate the deployment of meters and close the current metering gap, thereby reducing commercial and collection losses for DisCos, enhancing service quality, and improving customer satisfaction.”
They emphasized the necessity to speed up metering for customers in tariff Band A for revenue protection and effective demand-side management.
As of the April 2024 market settlement cycle, N21.86 billion is available for the first tranche of meter procurement under the MAF scheme.
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NERC approved the allocation of N21 billion for the first tranche (Tranche A) of the MAF scheme, with funds distributed pro rata based on contributions by DisCos.
DisCos are required to use these funds to procure and install meters for unmetered Band A customers within their franchise areas.
DisCos must conduct a transparent and competitive procurement process within 14 days from the effective date of the order to determine meter prices and select Meter Asset Providers (MAPs)/Local Meter Manufacturers and Assemblers (LMMAs) for the MAF scheme.
A breakdown of fund allocation among DisCos shows:
- Ikeja Electric: N4.36 billion
- Abuja DisCo: N2.99 billion
- Eko DisCo: N2.92 billion
- Ibadan DisCo: N2.51 billion
- Enugu DisCo: N1.72 billion
- Benin DisCo: N1.57 billion
- Kano DisCo: N1.56 billion
- Port Harcourt DisCo: N1.36 billion
- Kaduna Electric: N1.22 billion
- Jos DisCo: N521.90 million
- Yola DisCo: N243.35 million
In a related development, Kano Electricity Distribution Company (KEDCO) has taken legal action against the Manufacturers Association of Nigeria (MAN) over a tariff dispute, citing a revenue loss of N5.3 billion monthly.
KEDCO’s Head of Corporate Communications, Sani Bala Sani, stated that MAN directed its members not to pay the new Band A electricity tariff approved by NERC from April, leading to substantial revenue losses for KEDCO.
KEDCO accused MAN of unlawful interference and noted that various macroeconomic factors, such as exchange rates, gas prices, and inflation, necessitated the tariff increase from N159.13 per kWh to N225.00 per kWh.
The company claims that MAN’s directive has led Band A customers to breach their obligation to pay the newly approved tariff, thereby unfairly burdening KEDCO with the consequences of the subsidy removal on Band A customers.