INTERVIEW: All Nigerian Homes Will Be Metered By 2020 – NERC Chairman

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Acting Chairman, Nigerian Electricity Regulatory Commission, (NERC), Prof. James Momoh

The Meter Asset Providers (MAPs) Regulation seeks to close the metering gaps in the country through its outlined guidelines. Acting Chairman, Nigerian Electricity Regulatory Commission (NERC), Prof. James Momoh, spoke with The New Diplomat’s ‘Dotun Akintomide on the sideline of a recent workshop organized in Lagos to address the challenges faced by stakeholders in the electricity distribution chain in implementing the MAPs’ regulation. Prof. Momoh expressed strong optimism that before 2020, MAP would put a stop to estimated billing and its attendant effects on Nigerian households. He also spoke on power subsidy for the rural poor, as well as tariff review.

EXCERPTS:

How’s NERC implementing the MAPs’ regulation to close metering gap in Nigeria?

We’re here to facilitate each of the DISCOs to close the metering gap. We have been providing the needed support to franchised entrepreneurs (the MAPs) who want to participate and help us close the metering gap. The MAP is an opportunity for the first time in Nigeria where customers will not have to ask a question on issues relating to the non-availability of meters or the challenges of estimated billings. To make that happen, meters have to be provided. And the regulation passed by NERC is to make this happen.

Recently, the Minister of Power, Works and Housing, Mr. Babatunde Fashola while reeling out his office’s milestone, said in early 2019, the MAPs will start rolling out the meters, but after today’s briefings by the DISCOs, do you think that’s still visible?

We’re not taking this lightly with them (DISCOs). We reminded them that there’s a need for them to do it timely and many of the providers have already sent their letters of intent; and expressions of interest have been out there. Many of the providers had already submitted their bids as you have heard today both technically and financially. I don’t guarantee that it’s going to happen in January 1st, but before 2020, all Nigerian homes would be metered. We will keep working with the MAPS and the DISCOS to get it done.

What about the penalties?

The sanctions are not now, we have a time limit. We promise Nigerians that we’re going to get it done by 2020. Hopefully, we will have time to push it out. Maybe every quarter there will be a time limit in terms of following up with the DISCOs and sanctions will come when they fail to meet up with the deadline. That’s the reason why we had this meeting to remind them of what’s expected of them and we believe they would get it done.

Where are you now on the capping of the estimated billing?

Capping is a way of putting a cap on how much a customer should be charged in lieu of meters being provided at their homes while that being done. We have sent out our consultation paper which is already posted on our website, we’re receiving feedbacks. So hopefully, in about 60 days or less, we would have completed the feedback from customers and all our stakeholders in terms of what capping should look like. It’s at that point that we’ll put it into an order that would be enforced by NERC. But we don’t just want say capping is an alternative solution to meter. What we’re saying is that in lieu of meters being provided, what do we do? We have to make sure that customers are also part of the picture. Meanwhile, while the metering is being provided the capping of electricity is being done.

A preponderance of Nigerians living in rural areas believe electricity is more of a social good, than service that should be tarrif-sustained. Would you want to say government should subsidize power for the rural poor?

There are already classes of support from government in terms of making sure the actual cost of electricity is subsidized. Not only by the word subsidy alone, but there are new technologies that are cheaper that government is encouraging in the rural areas such as minigrid. These allow small business producers have access to power at a cheaper rate. We’re not again in that age where we say electricity is for social service, electricity is an economic business. So it’s about money. It’s money in, power out. It’s just that government in its leadership has to provide new methodologies and opportunities to rural areas that are underseved, such as the minigrid and I think that’s where the subsidy might come in to assist our community at large.

DISCOs often see the minigrid model of electrification as a threat to their business. Would you ask the government to aggresively push for it or instead support the large-scale grid expansion?

There are two questions to ask: Where is it necessary? Where is it profitable? And also whether meaningful minigrids should be provided where we have limited number of customers. But at the same time we don’t want to wait before a large scale transmission grid will get to those customers and also we don’t want to account for a lot of losses in the process. So by having this off-grid or minigrid that can easily be accessible with the required less-wiring infrastructures to build, then it’s something to be considered. Right now we have people in the villages using diesel and gasoline engines to power their homes, but minigrids can be cheaper and can be a substitute for all these. Sometimes the source of power is wind, solar or an hybrid of it which is easily accessible and almost free from God. In which case, the technology of putting this together is less costly and it allows us to encourage that kind of option now. So I think to the extent of how much we have it all over the country, then we will be talking about industrialisation, minigrid will in itself be a source of industrialisation. Also for small businesses and households in the villages, minigrid may be something that’s closer to the customers. But government has to encourage the development of it in large numbers and of course to what extent should it be compared with central generation? In terms of reliability; in terms of security; in terms of affordability. Those are the indices that we have to use to compare the ratio for which we should push it and more or less, compared with the central power generation.

How much of the fines received by NERC as a result of regulatory sanctions have been remitted to Rural Electrification Fund (REF) in line with the provision of the Electric Power Sector Reform (EPSR) Act since 2005 when it took effect?

Everytime we fine, it goes to the REF that promotes all the support for rural electrification like the minigrid, energizing the economy, markets, university campuses. So it’s already being paid back to support the social good and the growth of the country. I don’t know the exact amount but it’s being remitted. Monies that come to us do go back to support the rural electrification project.

Sir, currently where are we on tariff review?

Tariff review as you know is ongoing. We’re working on it. But remember that the tariff change will depend on so many factors. In terms of enunerating the customers, making sure that people are metered so that people won’t be charged for the power they don’t use. It also depends on the GDP of the country. As the population is growing there are other factors too. So all those factors are being put together to determine cost reflective tariff. So far it’s customer based tariff which had not changed that much.

Any timeline for it?

There’s timeline, first of all in a week’s time we would have done minor review before the end of the year. And the major review is every five years. That has not changed yet. Our minor review is ongoing. We have visited many of the DISCOs to see where losses are. The ATC & C losses. Those are serious things where you have a lot of technical losses, commercial losses and collection losses. Once we can reduce those losses it helps us to come up with an optimal tariff.

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