NERC approves N21 billion for DisCos to meter electricity customers

The Nigerian government has announced the approval of N21 billion for the electricity Distribution Companies (DisCos) to provide meters for electricity customers.

The approval was contained in the NERC order No: NERC/2024/072 on the operationalisation of “Tranche A” of the Presidential Metering Initiative Under the Framework of Meter Acquisition Fund circular jointly signed by the commission’s Chairman, Sanusi Garba, and its Commissioner, Legal, Licencing and Compliance, Dafe Akpeneye.

The total fund, according to the Nigerian Electricity Regulatory Commission (NERC), is the first tranche of disbursement from the MAF scheme based on contributions made by DisCos as of the April 2024 market settlement.

According to the commission, the order takes effect from 13 June, and may be amended or revoked by subsequent orders issued by the commission.

“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 NGN 21.86 billion.

“The commission hereby approves the use of a sum of NGN 21 billion apportioned pro rata to contribution by the DisCos as Tranche A of the MAF scheme,” the commission said.

A breakdown of how the money would be allocated among the DisCos showed that Ikeja Electricity Distribution Company (IE) would be allocated N4.35 billion; Jos Electricity Distribution Company (JEDC) woud get N521 million; Kaduna Electricity Distribution Company (KAEDC) woud get N1.22 billion; Kano Electricity Distribution Company (KEDCO) will be allocated N1.56 billion; Port Harcourt Electricity Distribution Company (PHEDC) will be allocated N1.36 billion and Yola Electricity Distribution Company (YEDC) will get N243 million.

NERC noted that the inability of DisCos to raise financing in the form of debt or additional equity was identified as the major constraint in the acquisition and deployment of end-use meters and other capital investments.

The commission said the Meter Acquisition Fund (MAF) scheme was therefore developed and approved by the commission, primarily to address the challenge of DisCo credit worthiness inhibiting the deployment of end-use meter in the Nigerian Electricity Supply Industry (NESI) by creating a credible revenue stream from the market funds on the back of which long term financing may be secured by the utilities.

“The federal government has approved the Presidential Metering Initiative (PMI) with the overarching objective of closing the metering gap in the NESI within three years leveraging on smart metering technologies for data analytics.

“The MAF shall form one of the revenue streams for the repayment of the long-tenor financing for metering. The commission approved the deregulation of meter prices under the MAP scheme vide order NERC/2024/040 to ensure efficient pricing of meters while responding more quickly to changes in macroeconomic parameters.

“The order provides that all prices of meters under the MAP scheme shall be determined through a transparent and competitive bidding process by eligible MAPs.”

The commission noted that 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 the closure of the metering gap for all customers currently classified under tariff Band A, for revenue protection and facilitating demand side management for the affected customers.