DisCos Fail To Refund Customers

Electricity consumers who had paid for meter under the fluffy Meter Asset Provider(MAP) initiative of the federal government, are impatiently seeking refund from Electricity Distribution Companies(DisCos), most of which are reluctantly implementing repayment directive issued by the Nigerian Electricity Regulatory Commission(NERC) in the wake of failure of the initiative.

The government had, through the NERC, approved a regulation that provides for the supply, installation and maintenance of end-user meters by other parties approved by the commission. The regulation was designed to fast track a closure of the metering gap and encourage the development of independent and competitive meter services in the electricity industry.

The Meter Asset Provider (MAP) Regulation that became effective on April 3, 2018, introduced meter asset providers as a new set of service providers in Nigeria Electricity Supply Industry.

As assets with a technically useful life of 10-15 years, the regulation provides for the third-party financing of meters, under a Permit issued by the Commission, and amortisation over a period of 10 years. The DisCos, in line with their licensing terms and conditions, are obliged to achieve their metering targets as set by the Commission under the new regulation.

However, on April 1, 2023, the regulator directed DisCos to reimburse customers who had paid for the acquisition of meters under the Meter Asset Provider (MAP) Scheme. Under the policy all customers who paid for meters under the MAP Scheme shall be eligible for the repayment through energy credits.

LEADERSHIP findings however showed that most DisCos have not fully complied with the directive which is further frustrating those concerned given the adjustments in tariff by operators.

The president of the Nigeria Consumer Protection Network and Power Sector Perspectives Coordinator, Kunle Olubiyo, who shared his findings on the issue with our Correspondent said the non-compliances here are largely attributed to weakness of Regulatory Ecosystem.

‘It is not surprising.One would have been surprised if the Nigerian Electricity Regulatory Commission had acted the other way round,’ he said.

Olubiyo stressed that regulatory compromises occur where the Regulatory Ecosystem has demonstrated lack of capability and capacity to discharge oversights duties of sector’s specifics Enforcement of Extant Rules, Monitoring And Evaluation of Key Performance Indicators/ Benchmarked Global Best Practices in any given sector.

This, he opined, has increased regulatory uncertainty and upscale risks exposures in the sector leading to huge decline in end users’ customers’ confidence in the  industry.
However, the head Corporate Communications, Kano Disco, Sani Bala Sani, said, the DisCos are complying with the directive of NERC.

Reacting to LEADERSHIP enquiries, Sani, said: “We had 5,359 customers who acquired MAP Meters as at that period and we have commenced the refund since April. For every customer within that category who walks in to purchase a token gets his refund. And we report compliance to NERC monthly.”

On its part, Ikeja Electric(IE) said, the DisCos are equally complying but did not drop figures.

The spokesman of the DisCo, Kingsley Okotie, confirmed to our Correspondent that customers are being reimbursed through energy tokens.

Also, in his response, Eko DisCo general manager, Corporate Communications and Strategy, Babatunde Lasaki, said the DisCo has taken committed steps in building confidence and consistently promoting good governance structure that goes with quality service delivery.

Lasaki said, the DisCos has prioritised deployment of meters and is systematically closing the metering gap within its network. He said the NERC directive which came in April last year is being meticulously implemented.

The Meter Asset Provider Regulation (the Regulation), which became effective on 3 April 2018, provided for the supply, installation and maintenance of end-user meters by other parties approved by the Commission. The main objective of the Regulation was to address the metering gap, minimise energy theft and improve collection in the sector.

Section 8(f) of the Regulation provides that DisCos are obliged to reimburse customers who pay for meters under the MAP Scheme through equal instalments of energy credits, at the time of vending, with the cost of the meter amortised over a maximum period of 36 months, i.e., 3 years.

This also applies to upfront payment made by customers upon commencement of the MAP framework in 2018.

Based on the Regulations, the DisCos should have commenced the repayment of the cost of the meters purchased under the MAP Scheme to the relevant customers through energy credits over the period approved by the Commission.

However, LEADERSHIP learnt that most customers are yet to receive the cost reimbursements, primarily due to the difficult financial positions of most DisCos.

The NERC has therefore, through the recent Order, revised the commencement date and reimbursement period to 1 April 2023 and 10 years respectively.

The commission noted that the revision of the reimbursement timeline and tenor was based on their evaluation of the DisCos financial positions and aligns with the average useful life of pre-paid meters and the current term sheet adopted by the Central Bank of Nigeria(CBN) and other financial institutions for meter acquisition loans.

This revision, it stressed, will also ensure fairness, transparency and accountability of the metering process under the MAP framework and provides a fair mechanism for the reimbursement of meter costs to customers under the Scheme.

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