Power Punch Bridging the Metering Gap Through Customer Sensitisation by Doose Iortyom February 27, 2023 Published by Doose Iortyom The Nigerian energy sector strives to provide dependable electricity for its people through various initiatives and policies. One of these is a metering system that promotes transparency and accountability in billing. Unfortunately, meter adoption remains low. Therefore, bridging the metering gap through customer sensitisation is essential. According to the Nigerian Electricity Regulatory Commission (NERC) quarterly report for June 2022, the registered electricity customer population stands at 12.64 million. Out of this population, only 4.89 million customers, which is 38.7 per cent, are metered. This leaves an unmetered population of 7.78 million customers and a metering gap of 62.3 per cent. Metering is an essential component of the power sector value chain. It enables accurate billing, facilitates energy conservation, and generates revenue for power distribution companies (DisCos). However, inadequate metering continues to hinder the success of power sector reforms in Nigeria. Some consumers evade payment by bypassing their meters, while others face overcharging through estimated billing, favouring the DisCos. To address this challenge, the Nigerian government has implemented various initiatives to accelerate the deployment of meters across the country. These initiatives include the Meter Asset Provider (MAP) scheme and the National Mass Metering Programme (NMMP). The MAP scheme aims to facilitate the deployment of meters through third-party companies, while the NMMP works in collaboration with local meter manufacturers to provide smart prepaid meters to all unmetered customers. While these programmes have had some success, they have not achieved the desired levels of meter deployment. A contributing factor to this is the lack of customer awareness and participation. As a result, the government’s goal of closing the metering gap by 2023 seems unattainable at this time. DisCos must develop and deploy stakeholder engagement and communications strategies to support bridging the metering gap through customer sensitisation. These strategies should ensure customers are aware and supportive of the metering initiative. A lack of education on the benefits of metering is one of the drivers of low adoption rates of meters. Thus, sensitisation campaigns to educate customers on the benefits of metering, the meter installation process, and the demonstration of the meters’ integrity and the customers’ role in the metering process can go a long way in driving adoption rates. Similarly, in South Africa, the government launched the “Operation Khanyisa” programme to encourage households to install prepaid electricity meters. The programme involves a sensitisation campaign to educate citizens about the benefits of prepaid meters, including reducing electricity theft and promoting energy conservation. The Nigerian government can replicate such programmes in Nigeria to accelerate metering. Community outreach programmes are one of the most effective ways of sensitising customers to the benefits of metering. These programmes involve directly engaging customers in their communities to educate them on the importance of metering and participating in the meter installation process. Community outreach programmes can also allow customers to ask questions and seek clarification on any issues related to metering. Additionally, social media is an effective tool for customer sensitisation, particularly in Nigeria, where social media platforms are widely used and can reach a broad audience. DisCos can leverage these platforms to educate customers on the benefits of metering and provide regular updates on metering programmes and initiatives. Bridging the metering gap through customer sensitisation is crucial for achieving Nigeria’s reliable and sustainable power sector. DisCos and other electricity industry stakeholders must collaborate to develop inclusive sensitisation programmes that target all population segments. Effective customer awareness and engagement can lead to a transparent and accountable billing process, increased DisCo revenue, and improved access to reliable and affordable electricity for households and businesses. February 27, 2023 0 comments 0 FacebookTwitterPinterestEmail
Power Punch The Impacts of Electricity Theft on the Power Sector by Doose Iortyom January 23, 2023 Published by Doose Iortyom Electricity theft is a problem as old as the power sector. It involves deliberately deceiving the electricity company by tampering with meters and stealing power from the grid. This illicit activity not only leads to significant financial losses for power companies but also undermines the reliability and stability of the electricity grid. Hence, it is vital to delve into and understand the impacts of electricity theft on the power sector and treat this issue with the urgency it requires. Electricity theft is a problem for the electricity supply industry in many countries, with enormous consequences. In Nigeria, while Distribution Companies (DisCos) significantly bear its impact, the overall adverse effect of electricity theft affects the value chain. Electricity theft allows consumers to use electricity without paying for it, thus leaving the DisCos with a huge liability. For example, electricity theft leads to the inability of DisCos to pay for electricity transmitted from the Generation companies (GenCos). This then reduces revenue to GenCos while increasing the cost of generating electricity. An Association of Nigerian Electricity Distributors (ANED) report showed that over ₦30,000,000,000 (thirty billion nairas) of monthly revenue was lost to electricity theft, vandalism and meter bypass cases. This loss of revenue not only affects the financial viability of power companies but also hinders the ability of power companies to invest in infrastructure and equipment needed to improve power supply to electricity customers. The impacts of electricity theft on the power sector also include the fact that the reliability and stability of the power grid are undermined. This occurs because stolen electricity is not metered and, therefore, not accounted for in the power company’s load management system. This gap can overload the power grid and cause power outages, particularly in areas where electricity theft is prevalent. The implications of electricity theft can be harmful and life-threatening when electrical fires and explosions erupt. For instance, when people tamper with electricity meters and leave wires or connections exposed or loose, it can cause overheating and alight, putting anyone within proximity in danger. Efforts to combat electricity theft in Nigeria have been ongoing for many years, with power companies and the Nigerian government implementing various measures to curb these financial losses. We see this in policies like the National Mass Metering Programme (NMMP) with the backing of the Central Bank of Nigeria (CBN). The aim is simple – promoting prepaid meters, which allow customers to pay for electricity in advance and reduce the incentive for electricity theft. In 2013, the NERC formulated the Electricity theft and other related offences regulations to deter electricity theft and the destruction of electricity supply infrastructure. In addition to these measures, there is a need for more effective enforcement of existing regulations and laws related to electricity theft. These laws can be activated through greater collaboration between power companies and law enforcement agencies. Furthermore, increased public awareness and education about the impacts of electricity theft on the power sector and accompanying consequences will deter prospective offenders. Taking a cue from the United Kingdom, the Nigerian government can extend the existing whistle-blowing policy to energy theft. While efforts continue towards investment in the Nigerian Electricity Supply Industry (NESI), it is crucial to understand the system losses and take corrective actions to utilize the available power better. Eradicating electricity theft may seem far-fetched. However, with intensified efforts and very efficient systems in place, these losses can be reduced to the barest minimum. January 23, 2023 0 comments 0 FacebookTwitterPinterestEmail
Power Podcast Prospects for Sub-franchising in the DisCos: What Next? by Aisi Atiti November 29, 2022 Published by Aisi Atiti The growing urbanisation in the country requires distribution companies (DisCos) to improve power supply to be able to service end-user customers. This episode of the Nextier Power Podcast features Abigail Botsha, the Head of Marketing and Business Development at GVE Projects Limited. Ms. Botsha joins us to explore some of the prospects for sub-franchising in the DisCos DisCos. November 29, 2022 0 comments 0 FacebookTwitterPinterestEmail
Power Punch The NESI’s Metering Conundrum by Aisi Atiti August 2, 2022 Published by Aisi Atiti The sub-sectors in the Nigerian Electricity Supply Industry (NESI), generation, transmission and distribution, face peculiar challenges that impede adequate power supply to consumers and deepen the liquidity crisis. Among these challenges, the NESI’s metering conundrum is of great concern. Since the 2013 privatisation of the sector, the electricity metering gap has done nothing but grow. For this reason, most electricity customers pay for tariffs according to their distribution companies’ estimated billing procedures (DisCos). However, the estimated billing procedures consistently lack transparency and room for accountability. And because customers cannot adequately prove that the amount they pay is equivalent to the electricity supply, it reduces their willingness to pay bills. Therefore, the DisCos’ collection rates decrease, and the liquidity crisis worsens. However, post-privatisation, the Nigerian power sector has experienced the implementation of different metering schemes. In 2015, the Nigeria Electricity Regulatory Commission (NERC) introduced the Credited Advanced Payment for Metering Implementation (CAPMI) scheme. Although unsuccessful, CAPMI aimed to provide meters to customers willing to pay, while their DisCos refunded the cost in cash or equivalent energy units. After the failure of CAPMI, NERC introduced the Meter Asset Provider (MAP) scheme in 2018. The MAP scheme sought to empower meter asset providers to finance, procure and install meters for electricity customers in the country. The cost of the meters was to be recovered through a Metering Service Charge billed to the customers as part of their tariffs. Unfortunately, this metering scheme has not been as successful as expected. To further address the NESI’s metering conundrum, the federal government launched the first phase (Phase 0) of the National Mass Metering Programme (NMMP) on the 30th of October 2020 with a loan from the Central Bank of Nigeria (CBN). The programme’s first phase aimed to disburse a million meters to electricity consumers; however, only about 980,000 meters were disbursed. Although the goal for the first phase wasn’t reached, the NMMP is already thought to be better than the MAP, which installed 350,000 meters in over eighteen months. The NERC Commissioner for Finance and Management Services, Mr Nathan Shatti, recently announced that the second phase (Phase 1) of the NMMP would commence in August 2022. The Regulator further stated that 45 local meter manufacturers are bidding to be part of this second phase. Shatti said: Our target is to install four million meters for customers. From our experience in phase zero, we want to make sure that the manufacturers can deliver before allocation is made. However, due to allegations of fraud by the CBN against some Meter Asset Providers (MAPs), the second phase of the NMMP seems to have been put on hold. So far, the CBN has provided over ₦60 billion in intervention funds to address the NESI’s metering challenges. However, despite these interventions, the NESI’s metering conundrum remains a massive bottleneck. In their latest Commercial KPIs Q4/2021 report, the Association of Nigerian Electricity Distributors (ANED) reported that of the 10 million electricity customers in the country, only 4.7 million are metered, which leaves 5.3 million unmetered registered customers. At the end of 2021, over 10 million customers are registered, with approximately 47 per cent metered. However, data obtained from NERC shows that there are 12.78 million registered electricity customers in the country. The NERC data also shows that the value for metered customers drops to 37.3 per cent, with unmetered customers being 62.7 per cent. These disparities in data beg the importance of a system that adequately enumerates electricity customers and the progress of metering schemes as they move forward. Also, how can the CBN ensure that metering intervention funds are adequately utilised, and the NMMP does not fail? These critical questions must be overcome for any effort at addressing the NESI’s metering conundrum to be productive. August 2, 2022 1 comment 0 FacebookTwitterPinterestEmail
Power Punch The Senate’s Bill to Improve Power Supply by Aisi Atiti July 28, 2022 Published by Aisi Atiti The Nigerian Senate recently passed a bill to improve the power supply to electricity consumers in the country. The Electricity Bill 2022 is a follow-up to the report of the Senate Committee on Power. It aims to enable a legal and institutional framework that maximally harnesses the sector’s privatisation. The partial privatisation of the electricity sector in 2013 led to the creation of six generation companies (GenCos), 11 distribution companies (DisCos) and the government-run Transmission Company of Nigeria (TCN). Although the introduction of the private sector intended to improve investment and efficiency in the electricity industry, the sector is plagued with many challenges today. The GenCos, DisCos, and the TCN face their respective bottlenecks that impede electricity supply to customers and the sector’s growth. These challenges include unavailable gas supply, poor network infrastructure and Aggregate Technical, Commercial and Collection (ATC&C) losses. However, one of the most pressing concerns is the inability of the transmission and distribution sub-sectors to wheel and distribute generated electricity to customers. The GenCos revealed in a 2021 fact sheet that despite the average power generation capacity being 6,336.52MW every month, the capacity put on the grid averaged at 4,118.98MW. This totalled 26,976MW of stranded power in 2021. However, the Senate’s Electricity Bill to improve power supply aims to reduce the stranded power in the sector. According to Gabriel Suswam, Chairman Senate Committee on Power, the bill would improve the use of generated power through investments when passed into law. He added that the bill would encourage policies and regulations that enable the transmission network’s expansion and address the industry’s technological limitations. However, the bill to improve power supply would not be the first intervention in the electricity sector. In fact, the industry has received over ₦2 trillion in investments post-privatisation. One of these investments is the most recent Central Bank of Nigeria (CBN) intervention of $250 million (₦103 billion) to improve the rehabilitation of transmission and distribution infrastructure. In addition, there is also the CBN-funded Nigerian Electricity Market Stabilisation Facility (NEMSF) of ₦213 billion, among other interventions. The apparent failures of past intervention programmes in Nigeria’s electricity sector have led to stakeholders’ opinions. As a result, some stakeholders have suggested that the privatisation process be reversed as the challenges continue to affect electricity customers in terms of poor electricity supply, tariff hikes and the increased cost of running alternate power generation sources. According to Comrade Hassan Sunmonu, the Pioneer President of the Nigeria Labour Congress (NLC), “Even with the privatisation, the government is still spending public funds on the sector. If not, the whole country would have been in total darkness by now. I’m 100 per cent in support of the government reviewing the privatised power sector.” So, if these past interventions have failed to increase the sector’s efficiency, what assurances are there that the Electricity Bill to improve power supply would be beneficial? What frameworks would ensure the monitoring of investments to develop the electricity network infrastructure? And how can electricity customers in the country be convinced that this isn’t another inconsequential move to improve the Nigeria Electricity Supply Industry (NESI)? July 28, 2022 1 comment 0 FacebookTwitterPinterestEmail
Power Punch State of the NESI: DisCos Being Restructured for Unpaid Loans by Aisi Atiti July 7, 2022 Published by Aisi Atiti The partial privatisation of the Nigerian power sector in 2013 led to the development of six Generation Companies (GenCos), eleven Distribution Companies (DisCos) and the government-run Transmission Company of Nigeria (TCN). Although the unbundling aimed to create a competitive electricity market for the Nigerian Electricity Supply Industry (NESI), that is not the case today. The current state of the NESI is DisCos being restructured for unpaid loans. The federal government recently announced that five (5) distribution companies would be reformed due to the inability to repay loans borrowed during 2013 unbundling. The affected DisCos are Benin Electricity Distribution Company (BEDC), Ibadan Electricity Distribution Company (IBEDC), Port Harcourt Electricity Distribution Company (PHEDC), Kaduna Electric and Kano Electricity Distribution Company (KEDCO). The announcement was made by the Executive Chairman of the Nigeria Electricity Regulatory Commission (NERC), Sanusi Garba, and the Director-General of the Bureau of Public Enterprises (BPE), Alex Okoh. They both stated that the move to reform the DisCos was necessary after Fidelity Bank activated the call on the collateralised shares of BEDC, Kaduna Electric and KEDCO. According to the statement, the bank made the activation due to the DisCos’ inabilities to repay loans used in acquiring assets for privatisation. This current state of the NESI involving DisCos being restructured for unpaid loans has a lot of intricacies. NERC and BPE have approved the list of new board members for the DisCos provided by the bank. BEDC: KC Akuma (Chairman), Adeola Ijose (Member), Charles Onwera (Member).Kaduna Electric: Abbas Jega (Chairman), Ameenu Abubakar (Member), Marlene Ngoyi (Member).KEDCO: Hasan Tukur (Chairman), Nelson Ahaneku (Member), Engr. Rabiu Suleiman (Member).IBEDC: Ahmed Kuru (Chairman), Eberechukwu Uneze (Member), Aminu Ismail (Member). However, to protect the government’s 40 per cent (%) interest in the DisCos, the BPE has also nominated Yomi Adeyemi (BEDC), Umar Abdullahi (Kaduna Electric) and Bashir Gwandu (KEDCO) and Oluwaseyi Akinwale (IBEDC). In addition, NERC and the BPE have appointed managing directors to ensure the process of business continuity for the DisCos: Henry Ajagbawa (BEDC), Yusuf Usman Yahaya (Kaduna Electric) and Ahmad Dangana (KEDCO). According to the statement: Lastly, we are restructuring the Management and Board of Port Harcourt DISCO to forestall the imminent insolvency of the entity. As a condition for support to the entity to meet its market obligations, Iboroma Akpana will take over as the Chairman of the Board. Emmanuel Okotete, Eyo Ekpo, Ismaila Shuaibu and the DG of BPE will form the interim Board. Mr Benson Uwheru will take over as the Managing Director of PHEDC as part of the changes. The current state of the NESI involving DisCos being restructured for unpaid loans was not the envisaged vision post-privatisation. As a result, experts have urged for the power sector’s privatisation to be reversed. In a statement, Kunle Olubiyo, President of Nigeria Consumer Protection Network, said: It is either the Federal Government do a mid-term review of the privatisation process or total reversal of the privatisation. We did not get it right… Mr Olubiyo added that the government has spent more on the sector post-privatisation than on the defunct National Electric Power Authority (NEPA) and Power Holding Company of Nigeria (PHCN). Privatising the power sector was supposed to yield increased generation and efficiency and attract private investment; however, DisCos being restructured for unpaid debts proves otherwise. July 7, 2022 1 comment 0 FacebookTwitterPinterestEmail
