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Price increase unlikely to close metering gap
Stakeholders have raised concerns about the Nigerian Electricity Regulatory Commission’s (NERC) decision to increase prices of electricity meters, saying it is unlikely to bridge the over seven million metering gap and ensure a stable power supply.
The Federal Government, through NERC, had yesterday increased the price of prepaid meters by over 40 per cent, blaming it on foreign exchange and inflation.
NERC had announced the approval of an upward price increase in an order released with the number, NERC/2023/020, jointly signed by the commission’s Chairman, Sanusi Garba, and its Commissioner, Legal, Licensing and Compliance, Dafe Akpeneye.
According to the circular, a single-phase prepaid meter, which was selling for N58,661.69 would now sell for N81,975.16, while three phase prepaid meter is increased to N143,836.10k from N109,684.36k.
This followed a letter written by the Meter Manufacturers and Assemblage Association of Nigeria (MMAAN), dated April 17, 2023, which asked NERC to increase the price of prepaid meters from the current price per unit of a single-phase meter N58, 661.69 to N117, 323.38, while the current price per unit of a three-phase meter be reviewed from the present price of N109,684.36 to N219,368.72 (excluding VAT).
NERC, in the circular, said the development would “ensure Meter Asset Providers (MAPs) ability to recover reasonable costs associated with meter procurement and maintenance, while ensuring that their pricing structure allows for a viable return on investment; evaluate the affordability of meter services for consumers, aiming to prevent excessive pricing that could burden end-users; and ensure that MAPs are able to provide meters to end-use customers in the prevailing economic realities.”
The order noted further that the “new price is meant to ensure a fair and reasonable pricing of meters to both MAPs and end-use customers.”
However, stakeholders have stated that the move is unlikely to bring any significant improvement to the sector, which has been plagued by metering gaps and power supply instability.
According to them, the high cost of electricity tariffs has been one of the major reasons for the large metering gap in the country, which stands at over 60 per cent.
The stakeholders therefore called on the government and NERC to prioritise the implementation of measures that will address the metering gap, improve power supply, and reduce the cost of electricity tariffs.
Executive Director, Research and Advocacy, Association of the Nigerian Electricity Distributors (ANED), Sunday Oduntan, said it’s the duty of NERC as a regulator to check the sustainability of the meter prices with the level of inflation in the country, noting that without the price adjustment, there might be a stall in the supply of meters by manufacturers due to cost.
“DisCos don’t supply meters, the suppliers are third party appointed and accredited by NERC, they must have looked at a lot of factors, including inflation and foreign exchange to do that kind of adjustment,” he said.
Principal Action Coordinator, Joint Action for Electricity Consumers Right, Ayodele Olawoye, said the government’s aim of closing the metering gap would not be achieved with the increase in meter price as the request for meter would be low.
He stressed further that the only way it could be managed is if installment payment, which was one of the unimplemented orders, can be reintroduced.
“Another NERC area of weaknesses is the failure to enforce and monitor some of its orders regarding the closure of metering gaps being flouted freely by the DisCos. If the meter price is hiked, those earlier mentioned requests should come into force,” he said.
Also, Senior Partner, PPP Consults, Joe Tsavsar, said with the hike in meter price, the sector is far from bridging the metering gap, noting that it won’t yield any positive outcome.
“The problem with the sector is if you are suppressing the cost, you can’t get the output as it’s the real cost that would give the expected output, we have been playing with the meter issue that is why there has not been any positive result, they are not doing the right thing, if they do it right the result would come out well,” he said.
