The recent directive by the Nigeria Electricity Regulatory Commission (NERC) that distribution companies (DISCOs), under the Power Holding Company of Nigeria (PHCN) should ensure the metering of all customers’ houses across the country within 18 months could simply be seen as a blue-Peter or blanket-bath for the unbundled power company.
It has since been noticed by Nigerians that even when houses are metered, NEPA/PHCN staff do not read meters before billing, rather they deliberately estimate and issue ‘crazy bills’ and charging consumers for power they did not consume. Even the distribution companies claim that average consumption of those who were adequately metered was applied to a cluster of residence to arrive at estimated consumption and customers believe that the DISCOs calculations for estimated billing were not based on established scientific or reliable parameters.
Eyo Ekpo, the Commissioner for Marketing, Competition and Rates of the NERC had ordered all the DISCOs to submit their metering plans for an effective billing system, adding that the distribution companies were expected to complete the metering process between 12 and 18 months.
“We have told them that between 12 and 18 months, they should be able to meter all houses of their customers” , Ekpo said.
According to him, NERC is determined to ensure greater number of meter distribution to customers.
The main issue bothering customers and Nigerians as a whole is not the metering of their houses but the question is, are PHCN staff prepared to read the meters and give consumers accurate bills?
Metering of electricity in Nigeria, according to a report submitted by the Metering Inquiry Committee, began with the production and consumption of electricity around 1895. The system and process are, however, bedeviled by inefficiencies and corrupt practices.
Historically, electricity metering was centrally coordinated with the various units of NEPA/PHCN at the distribution end relying on the procurement apparatus at the headquarters to procure and distribute meters to customers through three central stores. This inefficient system led to a backlog of meter requests by customers who pay for such services without the meters being installed.
The resultant effect has been the institutionalization of the unwholesome practice of estimated billing and the attendant customer dissatisfaction and disappointment, which partly accounts for consumers’ refusal to register for meters.
It is against this backdrop that the Metering Inquiry Committee was set up to garner data and information on the root cause of the endemic metering crisis in the country which impacts the electricity sector negatively. During its assignment a few weeks ago, the committee discovered that less than 50 per cent of the registered customers in the Nigerian Electricity sector are metered.
This has led to the prevalent practice of arbitrary charges based on unscientific estimation of electricity consumed by customers by the DISCOs in order to meet up with their overhead costs in an environment of inefficiency and dwindling supply of electricity.
According to the committee’s report, the total number of customers captured in the records of operators of the Nigerian Electricity Supply Industry is 5,172,979, which represents 18.65 per cent of Nigeria’s total households put at 28,900,492 as provided by records from the National Bureau of Statistics in 2006. This record, however, does not include those enjoying electricity illegally who are not registered by the DISCOs, known as illegal consumers’.
Out of the number of customers registered, 2,893,701 or 55.94 per cent were metered, while 2,355,045 or 45.53 per cent were unmetered. The Committee, however, discovered that out of the total number of customers metered, about 701,385 or 22 per cent of the meters were faulty. At present, a total of 2,956,069 or 54.83 per cent of all the customers registered are not metered at all or have no functional meters. On the average, therefore, only about 2,434,541 or a minute 8.42 per cent of the total households in Nigeria are currently being billed correctly by all DISCOs if a household is used as our metering index.
The remaining registered customers are, therefore, at the mercy of estimated billing. This development has created a wide gap in effective billing which calls for emergency response.
In Port Harcourt, the Rivers State capital, the Business Manager, Diobu Business Unit of the PHCN, Festus Mmegbu disclosed that as at march this year, 85 per cent of the 36,000 customers using electricity in the area do not have meters. He said there was massive deployment and installation of meters going on and called on customers to register and pay for meters.
He regretted that failure by customers to install meters at their premises was causing under-estimation.
Most customers are clamouring for pre-paid meters as a more efficient metering system that can guarantee accurate billing. This is why the Chief Executive of Ikeja Electricity Distribution Company Plc expressed concern over agitations of customers for prepaid meters which are being used in the area currently.
There is need to develop and adopt a metering system aimed at making smooth and effective our electricity operations. To ensure customer satisfaction, special units should be established by the distribution companies such as tracking/management of customer account records and debts to ensure that no unwarranted debts or excessive estimations are made and also ensure that where frivolous estimates were made in the past, they will be expunged to give credibility to the bills and billing operations.
Electricity distribution companies should ensure fairness in dealing with their customers to maintain the trust and confidence reposed in them. There should be an elaborate customer reclassification exercise aimed at ensuring that no customer is placed on the wrong tariff class. To enjoy the cooperation of customers, distribution companies must make sure that their Chief Executive Officers (CEOs) are responsible, efficient and accountable.
They should avoid the situation where monies for meters are paid through draft by customers to the CEOs and there is no feedback as to whether they get the meter or not, and how long the customer stays before getting meter. It is discovered that in most of distribution companies, customers paid for meters for years and yet were not supplied any. In most cases, meters are not scarce but the company staff demand for kick-back before releasing the meter.
There are also evidences of some DISCOs refusing customers’ payments for meters, especially pre-payment meters. Indeed, sharp practices and inefficiencies are the hallmarks of the metering system in Nigeria, from ageing power plants and terrible transmission lines to more importantly, rampant corruption and poor collection rates.
In all the six geo-political zones visited by the Metering Inquiry Committee, complaints ranging from refusal to meter customers, estimated billing following refusal to read installed Non-PPM meters, culture of impunity of PHCN staff, connivance of some unscrupulous PHCN staff with private individuals to defraud the public were received.
Other irregularities discovered were demand for money for preferential treatment in various forms such as hot lines, tamper code, PR (unreceipted additional payment for supply of meters. Estimated billing was the norm in all the DISCOs visited by the committee. For instance, customers in Lagos, Enugu, Yola, Kaduna, Makurdi and Abuja distribution companies alleged that delay in the supply of meters to customers and blantant refusal to obtain correct meter readings which resulted in estimated billing were deliberate. They were of the view that with the poor supply of electricity in the country and gross inefficiency on the part of distribution companies to curtail operational losses (human and technical) estimate billing remains the only option for the DISCOs.
For Nigeria to get it right in the metering policy, the Federal Government through the Nigerian Electricity Regulatory Commission (NERC) should review the operations of the distribution companies, especially now that the power sector reform is on the front burner of the present administration coupled with the privatization process of the Power Holding Company of Nigeria (PHCN).
NERC should adopt a regulatory system that would make it obligatory for DISCOs to meter their distribution transformers for adequate energy accounting and equity as well as intensify its monitoring and enforcement machinery to ensure proper implementation of existing regulations on metering, billing and cash collection. There shall be overall improvement in customer service and operations to eliminate the culture of impunity prevailing in the electricity sector.