Metering Deregulation: Strategies for Sustainable Improvement

Recent data indicating an uptick in complaints regarding metering issues has made the
deregulation of meter supply a welcome idea (to me, at least). In the February report of the
Nigerian Electricity Regulatory Commission (NERC), complaints around metering issues
constituted 54% of complaints from end-users compared to 20% in 2023.

Data like this has reinforced my belief in a fresh framework for deploying electricity meters.
Today, NERC has dismantled the regulated, constrained supply market of electricity meters,
opening the door for licensed Metering Asset Providers (MAP) to supply their “goods” across
DISCO territories nationally.

This allows MAPs to provide meters to any end-use customer based on DISCOs’ specifications on a willing-buyer, willing-seller basis. This latest development will unarguably enhance the penetration of metering assets for reduced ATC& C, improved billing, and collection in NESI.

The deregulation of the final cost of the meter and its supply offers an avenue for increased availability and the associated increase in the metering rate, which currently stands at about 44% of total electricity customers.

However, this new development should not be considered the “almighty” formula for solving our
metering equation. Aside from its potential for increased metering costs, the order stipulates
measures in the form of fines for late meter supply from the payment date.

This leaves a loophole because MAPs may simply not receive the end-users payment for the metering device until they can guarantee the date of supply. In hindsight, the low metering rate has evidenced DISCOs’ failure to evolve and proffer solutions to decade-long systemic issues.

Improvements in metering in NESI have primarily been through the unending and expensive interventions of the federal government aimed at ensuring near-universal metering of electricity end-users. The capital investment in the distribution network by DISCOs has been subpar arguably, partly because of illiquidity in the NESI.

Most DISCOs have failed in infrastructure expansion, network improvement, service
provision, asset maintenance, metering, etc., as mandated as part of the privatization a decade
ago. Many of the developments in the distribution networks were made by individuals, collectives
(estates, communities), state governments, and political office holders.

The federal government has developed and implemented policies like the National Mass Metering Program to shore up the number of metered customers. It instituted an SPV—The Meter Access Fund—with over N30 billion for the “collaterization” of local metering companies.

However, DISCOs have yet to reciprocate this government support for their business by
matching corporate actions in capacity development and capital injection, even though metering
is supposed to be the sole responsibility of DISCOs. There is a notion that the DISCOs benefit
from the lack of installed meters as this offers loopholes for sectoral transparency and empowers
the controversial estimated billing for unmetered end-users, allowing DISCOs to accrue revenue.

Another perspective is that the NESI’s illiquidity, partly due to the metering gaps, impeded
DISCOs’ ability to invest needed capital into developmental plans. DISCOs can facilitate a “push” methodology for universal metering rather than the current “pull”
by customers.

This will require intentional corporate action from DISCOs and substantial capital
investment, which the DISCOs claim not to have. However, this same strategy can help shore up
liquidity through loss prevention—a classic case of chicken and egg, in my opinion.

Through various sources, DISCOs should explore the opportunity to finance the procurement
of meters installed for end-users at no upfront costs. The lease, insurance, maintenance, and operational costs are billed to the end user as part of its consumption cost.

The new state-level electricity framework dispensation allows DISCOs to improve the metering
rate through liaison and collaboration between the state government and state-level subsidiaries
(Subcos). The state government can help fund meters, incentivise, and provide

The continuous dependence of the sector on the federal government, with the political bias of
“impressing and pacifying” the populace to vote to keep financing and aiding the improvement of the electricity metering rate is preposterous and tantamount to cheap blackmail.

Bayode Akomolafe writes from Stoney Creek, ON, Canada. He is a registered Power
Engineering professional with over 14 years of experience working in the power sector across
multiple world countries. He specializes in Engineering project development, technical
advisory, sustainability management, macro-energy consultancy, strategy, and policy
development.