Why Metering Programmes Fail in the Power Sector – NERC

Nigerian Electricity Regulatory Commission - NERC

Speaking during a virtual discussion organized by ‘The Power Hub’, the General Manager, Finance and Management Services of the Nigerian Electricity Regulatory Commission (NERC), Mr. Abdul Shettima listed project management failure and non-adherence to the terms of contracts as some of the reasons why past metering programmes in the country failed.

Shettima reiterated the pledge by NERC to ensure a refund to customers who paid for meters under the Credited Advanced Payment for Metering Implementation (CAPMI) scheme, which it admitted was a failed initiative.

He recalled that when the power sector was privatised, metering was one of the key components that the core investors were required to address, plus loss of reduction and network upgrade, but noted that unfortunately because of cost-reflectivity, technical partnership and a lot other issues, none of those targets were met.

Shettima stated that at the time of handover to the core investors, the CAPMI programme was in place, stressing that before then, when the sector was still completely under government control, over N9 billion had been expended on the metering problem without results.

“Nothing much came out from that initiative. Then the CAPMI came on board, and there was resistance by the core investors at the beginning of the programme, maybe because they didn’t understand the mechanics of the programme very well or they felt it was different from their own plans.

“Finally, when they were on board, the CAPMI wasn’t working well with a lot of complaints from customers making payments and not getting meters.

“Then the Meter Assets Provider (MAP) came up with a lot of optimism from all stakeholders. Unfortunately, we had some teething problems when it started, the main one being the customs levy which made the pricing unviable,” he said.

Shettima, who explained that after getting round the customs issue, then exchange rate issue became a problem, expressed optimism that the numbers had started picking up with the new scheme. He argued that there’s a bit of impatience in the industry, adding however that it was because, “things are not working well”, which he said is understandable.

In his opinion, the stakeholders have realized since the advent of the National Mass Metering Programme (NMMP) funded by the government that meters have to be in place to make any progress.

“I agree on the issue of project management, it is a key aspect. If you don’t do it well, surprises will come up and then the programme starts faltering. It is important to monitor and enforce sanctions where there are breaches.

“Contracts have to be respected, the penalties in the contract will have to be executed, ensure that there are performance guarantees under the MAP scheme and as well as securitisation arrangement by the Discos.

“So that where there’s failure or breach in the contractual terms, there will be penalties. Going forward, we should ensure that project management, sticking to contractual terms and sanctions as well as monitoring are enforced,” he posited.

Sharubutu added that the commission was aware that not everyone under the CAPMI programme and MAP initiative who paid have been refunded, promising that NERC was strongly working on compensating those affected.

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“We are aware that under the CAPMI , not every customer was compensated. Arrangements are being made to ensure all customers under that scheme are compensated.

“Under the MAP scheme, customers have made upfront payments and some have made payments in instalments. The customers that made instalment payments would be refunded through energy credit.

“The commission has released a consultation paper on the review of MAP regulations and compensation to customers. Arrangements are being made to ensure that whether CAPMI or MAP are refunded,” he said.