The liquidity crises in the power sector is seen as a major barrier in meeting the new deadline issued by the Nigeria Electricity Regulatory Commission, NERC, to power Distribution Companies, writes CHIKA IZUORA.
The latest deadline by the Nigeria Electricity Regulatory Commission (NERC), to electricity distribution companies (DISCOs) to issue meters to power consumers across the country is coming with mixed reactions. To consumers it is a long expected relief that will shed the burden of paying for electricity not consumed.
In the deadline, NERC also issued a stern warning that all DISCOs, which fail to meter electricity customers in their networks by 28 February 2017, will face sanction. So from 1 March 2017, NERC will begin to penalise the defaulting DISCOs. The penalty will be an outcome to the initial directives by the Commission and the moratorium period given to DISCOs to meter consumers.
The electricity regulator said this was in line with its mandate of protecting the rights of customers. Last June, after consultation with the operators, NERC directed the DISCOs to conclude metering of all customers before 30 Nov 2016. According to the Commission at the expiration of that notice, it granted three months extension, which will expire 28 February this year.
The deadline extension was meant to enable the DISCOs to effectively execute the metering deployment plan for customers. The Commission is now encouraging any electricity customer yet to be metered by 28 February, to report to the Commission through any of its offices in all the states of the federation. NERC also urged customers that had advanced money to the DISCOs through the now suspended Credited Advance Payment for Metering Initiatives, CAPMI, to make use of the complaint redress mechanism.
“The Commission is by this notice advising electricity customers not to take laws into their hands by attacking staff of electricity distribution companies” NERC said. The regulator continued: “They may wish to be guided not to resort to legal proceedings as the first option in seeking redress, but to explore the commission’s redress mechanism to save litigation cost and time.”
But Ikeja Disco reacting to enquiries by Leadership on its preparedness to avert the sanction, said, NERC may have been erroneously quoted in the directive. Felix Ofulue, spokesperson of the company told our correspondent that, a copy of the directive available to the company specifically mentioned, ‘Maximum Demand Customers’.
He said that he is not aware of the directive that ‘All’ consumers within its network should be metered by 28 of February. “We have had meeting with the regulator, and we understand all that were discussed, even though we have our meter roll out plan which we have been genuinely and religiously doing, the deadline as far as I know concerns Maximum Demand Customers.
Various Discos are undertaking enumeration of customers to determine the volume of meter required. Poor data and enumeration of customers, showing where they are, what they consume and how many have been metered have hampered efforts of the Discos to fully implement their metering initiative.
Chairman, MOMAS Electricity Meters Manufacturing Company Limited, Engr. Kola Balogun, MEMMCOL, faulted the directive on account that NERC is acting alone without consultation.
Balogun, who raised concern about the Discos meeting the deadline said, “Under normal circumstances, the regulator should have called a meeting of all stakeholders, like the Discos, customers’ representatives, local meter manufacturers and others. It is during such meetings that critical issues like meter availability, data as well as other technical issues will be discussed and time frame agreed”.
He argued that a unilateral decision just as the one taken by NERC will not help in realising the objective of issuing meters to customers. “The major issue here is that no one is sure if meters are available to the Discos. We don’t manufacture meters and keep on the shelves.
It is a function of demand and supply. Again NERC should have known that there is no standard in terms of meter in the country. Each Disco has its own specification, and it is when we are consulted and specification given that you can begin to put things together. Also, major components of the meter are imported, so if you consider availability of foreign exchange, clearing process and other factors you will see the difficulty in meeting the deadline”, he argued.
However, Muideen Adebayo Ibrahim, Executive Secretary, Electricity Meters Manufacturers Association of Nigeria (EMMAN) while speaking with our correspondent noted that prior to the power sector privatization the country was importing meters but the post privatization era has seen meters being manufactured in-country.
Ibrahim said the local industry has the capacity to meet demand of meters but like Balogun, he stressed that it is a function of demand. He also said that local manufacturers have the technical know-how adding that the meters that are produced in Nigeria can be compared to any international standard and that they have been tried and tested several times and they are very okay.
The local manufacturers are facing serious challenges especially in accessing Forex to import basic components which have hindered their production processes. They also like other industries faced with lack of stable Electricity, double taxation, high cost of diesel and unfavourable production environment as well as very High interest rate (double digit).
The executive secretary lamented low patronage of local companies by the Discos who have preference for imported meters. He said legislation is needed to compel them to patronise local meter makers as lack of support will have negative impact on the economy and a lot of employees would be laid off.
According to him, Unfortunately, it is only the Discos that can patronize our members. Unless electricity consumers can be allowed to buy meters as telephone users buy sim cards at will and from any subscriber of their choice. That is why the telephone sector is robust and moving forward in all fronts and also contributing tremendously to the GDP.
Speaking on seeming challenges, he said government should create a ‘special Forex window’ for meter manufacturers in order to import chips and basic raw material components that are not readily available in Nigeria. Special window was created for oil and gas industry, aviation and few others. Same should be done for meter manufacturers urgently.
Ibrahim also said, that loan should be made available to local factories at ‘single digit interest rate’, to enable them compete with their counterparts from China and other countries.
Government should also protect meter manufactures as their counterparts are protected in South Africa, China and other countries where meters are manufactured, he said and further urged that the issue of erratic power supply should be urgently looked into. He added that government should make favourable policies that will encourage members to strive more.
He said that the inherent value which the meter manufacturers adds to the economy include national self -reliance, creation of massive jobs an developing technology that is Nigerian which are better suited to protection and needs of the country as well as the people.