The Nigerian Electricity Regulatory Commission ( NERC) has approved a sum of N21billion to 11 Distribution Companies for the purchase of end-user consumer zsgag bridge the seven million the dnational metering gap.
This development was contained in NERC’s Order No: NERC/2024/072 on the Operationalization of “Tranche A” of the Presidential Metering Initiative Under the Framework of Meter Acquisition Fund effective 13th June 2024 and may be amended or revoked by subsequent Orders.
A breakdown of the MAF implementation – 1st Tranche disbursement allocation to DisCos are as follows:
Breakdown of the money shows Abuja Electricity Distribution Company (AEDC) gets N2,990,745,647; Benin Electricity Distribution Company (BEDC) – N1,571,276,806; Eko Electricity Distribution Company (EKEDC) – 2,921,896,285; Enugu Electricity Distribution Company (EEDC) – N1,726,893,467; Ibadan Electricity Distribution Company (IBEDC) – N42,516,469,752; Ikeja Electricity Distribution Company (IE) – N4,358,122,421; Jos Electricity Distribution Company (JEDC) – N521,905,774;
Kaduna Electricity Distribution Company (KAEDC) – N1,220,367,039; Kano Electricity Distribution Company (KEDCO) – N1,568,029,563; Port Harcourt Electricity Distribution Company (PHEDC) – N1,360,944,608 and Yola Electricity Distribution Company (YEDC) gets N243,348,639
This disbursement was sequel to the competitive bidding process held on 21 May 2024 based on the provisions of Order NERC/2024/040 where a 24 MAPs participated across the 12 (twelve) DisCos during which a total of 44 bids were submitted for 10 meter specifications, the regulator said.
The new Orders by the Commission specifies that: DisCos shall utilise the first tranche (“Tranche A”) of disbursement from the MAF scheme based on contributions made by DisCos as at the April 2024 market settlement and attached to this Order as Schedule 1, to procure and install meters for unmetered Band ‘A’ customers within their franchise areas;
DisCos shall, within 14 (fourteen) days from the effective date of this Order, conduct a transparent and compelitive procurement process, for meter price determination, selection and engagement of MAPs/LMMAs for the metering of end-use customer meters under the MAF scheme;A report containing details of the process undertaken for the selection of MAPs/LMMA:s, including meter price, meter specifications, and the list of customers to be metered shall be sent to the Commission for approval, within 20 (twenty) days from the effective date of this Order.
Forthermore, upon approval of the Commission, the DisCo shall enter into contracts with selected MAPs/LMMAs on one of the following terms: (i) Where an Advance Payment Guarantee (“APG”) issued by a commercial bank in Nigeria is provided by a qualifying MAP/LMMA, 30% of the contract sum shall be paid by the FM on behalf of the DisCo to the MAP/LMMA upon execution of the contract. A further 2 {two) milestone payments shall be made upon the completion of 60% of contracted quantities and 100% of the contract respectively, with the funds advanced against bank guarantee amortised over the payments. (ii) Where the MAP/LMMA do not request an advance payment, the milestone payments shall be made upon the verified installation of 20%, 60% and 100% respectively of the contracted volume of meters. A vendor may, at his opfion, defer payment until the completion of the installation of the contracted volumes. (iii) DisCos shall ensure that all the necessary resources and network clearance required by the MAP/LMMA to install meters based on installation plans are provided and/or completed.
The rest of the Order says that: Installation of contracted volume meters shall be completed within 60 days from the date of approval of the process by the Commission, and all contracts for the supply and installation of meters shall be filed with the Commission; the parties under the MAF scheme shall exhibit the highest degree of public trust and ethical standard and shall not engage in any conduct that may constitute unfair practice or conflict of interest; DisCos shall file audited reports under the Uniform System of Accounting, clearly reporting the performance of the MAF metering programme; The parties shall file the following reports with the Commission: (i) FM shall file Fund Performance Report quarterly to NERC while Risk Management Report shall be One-off. (ii) DisCos shall file Meter Deployment Plan – One-off to NERC/FM while its Monthly Meter Deployment Report shall be monthly to NERC/FM. (iii) MAPs/LMMAs shall file Meter Installation Report weekly to DisCos/FM/NERC.
NERC clarified that the Order is issued without prejudice to relevant provisions of the MAP and NMMR and other Regulations of the Commission not specifically mentioned herein.
BACKGROUND:
The Commission in 2018 introduced the Meter Asset Provider {“MAP”) Regulations and subsequently, the Meter Asset Provider and National Mass Metering (“MAP&NMMR”) Regulations in 2021 to address metering challenges in the Nigerian Electricity Supply Industry (“NESI“). The Regulations provided several opfions for metering end-use customers but the interventions, though significant, have not resulted in the closure of the national metering gap which currently stands in excess of seven million (7m) customers.
However, the inability of distribution companies (“DisCos”} to raise financing in the form of debt or additional equity was identified as the major constraint in the acquisition and deployment of end-use meters and other capital investments. The Meter Acquisifion Fund (“MAF”) scheme was therefore developed and approved by the Commission, primarily to address the challenge of DisCo creditworthiness inhibiting the deployment of end-use meters in NES| by creating a credible revenue stream from market funds on the back of which long term financing may be secured by the utilities. The fun shall be under the management of Fund Manager (“FM”) based on terms and conditions negotiated by the DisCos and approved by the Commission.
Subsequently, the Federal Government approved the Presidential Metering Initiative (“PMI”) with the overarching objective of closing the metering gap in the NES! within three years leveraging on smart metering technologies for data analytics. The MAF shall form one of the revenue streams for the repayment of the long tenor financing for metering. NERC also approved the deregulation of meter prices under the MAP scheme Order NERC/2024/040 to ensure an efficient pricing of meters while responding more quickly to changes in macroeconomic parameters. The Order provides that all prices of meters under the MAP scheme shall be determined through a transparent and competitive bidding process by eligible MAPs.
The deployment of funds under the MAF scheme shall accelerate the deployment of meters and a closure of the current metering gap thereby reducing commercial & collection losses to DisCos, enhancing quality of service and improvement of Customer satisfaction. While the NESI is expected to leverage on the revenue stream under the MAF framework to raise substantial capital funding for metering, there is an imperative to accelerate a closure of the metering gap for all customers currently classified under tariff Band A for the purpose of revenue protection and facilitating demand side management for the affected customers.
The funds accrued as at the April 2024 market settlement cycle and available for procurement of meters under the first tranche of the MAF scheme is in the sum of NGN21,864,851,725.00 {twenty-one billion eight hundred and sixty-four million, eight hundred and fifty-one thousand, seven hundred and twenty-five naira only).
The Commission hereby approves the use of a sum of NGN21,000
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