News

June 21, 2024

Electricity: NERC approves N21bn for DisCos to procure meters

Electricity

Electricity

…KEDC sues MAN over N5.3bn monthly losses

By Obas Esiedesa, Abuja

The Nigerian Electricity Regulatory Commission, NERC, on Friday approved N21 billion for electricity distribution companies, DisCos, to procure meters for customers.

The amount which will come from the Meter Acquisition Fund, MAF, would enable the utilities address the huge metering gap in the Nigerian Electricity Supply Industry, NESI.

NERC data showed that as at the end of April 2024, only 44.67 percent of the total 13.4 million registered customers have electricity meter.

The MAF is a component of the Multi-Year Year Tariff Order that sets out the tariff payable by customers.

The Commission in an order issued by its Chairman, Engr Sanusi Garba and Commissioner for Legal, Dale Akpeneye blamed the low metering rate on the inability of the DisCos to raise financing from lenders.

The Commission stated that “the deployment of funds under the MAF scheme shall accelerate the deployment of meters and a closure of the current metering gap thereby reducing commercial & collection losses to DisCos, enhancing quality of service and improvement of customer satisfaction.

“While the NESI is expected to leverage on the revenue stream under the MAF Framework to raise substantial capital funding for metering, there is an imperative to accelerate a closure of the metering gap For all customers currently classified under tariff Band A for the purpose of revenue protection and Facilitating demand side management for the affected customers.

“The funds accrued as at the April 2024 market settlement cycle and available For procurement of meters under the first tranche of the MAF scheme is in the sum of N21,864,851,725.00. The Commission hereby approves the use of a sum of N21 billion apportioned pro rata to contribution by the DisCos as Tranche A of the MAF scheme”.

NERC ordered that “DisCos shall utilise the first tranche (Tranche A) of disbursement from the MAF scheme based on contributions made by DisCos as at the April 2024 market settlement and attached to this Order as Schedule I, to procure and install meters for unmetered Band ‘A’ customers within their franchise areas.

“DisCos shall, within 14 days from the effective date of this Order, conduct a transparent and competitive procurement process, for meter price determination, selection and engagement of MAPs/LMMAs For the metering OF end-use customer meters under the MAF scheme”.

A breakdown of how the money would be allocated among the DisCos showed that Ikeja Electric with N4.36 billion would receive the highest amount, followed by Abuja DisCo with N2.99 billion.

Others are 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 and Yola DisCo N243.35 million.

Kano DisCo sues MAN over N5.3bn monthly losses

Meanwhile, the Kano Electricity Distribution Company has taken legal action against the Manufacturers Association of Nigeria, MAN, for loss of N5.3 billion revenue monthly over tariff dispute.

The company in a statement by Sani Bala Sani, Head, Corporate Communications said the action follows a directive by MAN asking its members not to pay the new Band A electricity tariff approved by NERC from the month of April.

KEDCO said the actions of MAN has subjected the “Company to a huge revenue loss of up to over 5.3billion Naira per month. The Company also accused MAN of unlawful interference with its business, despite their knowledge about FG’s removal of electricity subsidy for Band A customers and fluctuations in various macro-economic indices such as exchange rates, gas price, inflation and other factors responsible for computing electricity tariff.

“These factors have warranted KEDCO’s cost-reflective tariff increased from N159.13 per kWh to N225.00 per kWh”.

The company attributed the “conspiracy to actions including circular signed and issued by Director General of MAN, Segun Ajayi-Kadir, directing all its members, including other Band A customers to disregard their obligations and pay the old tariff rate on account rather than the statutory new tariff, as approved by the regulator. This has led customers on Band A to breach their obligations to pay the new approved tariff”.

It stated that the action of “MAN has made it to unfairly bear the burden of FG’s subsidy removal on Band A customers and the attendant losses, taking cognizance of the fact that KEDCO also has an obligation to pay the power generating companies a cost-reflective tariff”.