As a part effort to support and grow revenue of the power sector, the Central Bank of Nigeria, CBN, last week disclosed that it has disbursed about N3.6 billion for procurement of pre-paid meters to stabilise the billing system in electricity consumption in Nigeria as part of its N120.2 billion investments in distribution companies, DisCos, for infrastructure capital expenditure.
With about 55.5 percent of Nigeria’s 8.3 million electricity customers still without meters, the CBN intervention was described by the consumer group, Electricity Consumers Association, as a game-changer.
The group’s Chairman, Mr Usman John told newsmen that metering was a major challenge in the industry which the Federal Government must urgently address.
John urged the government to completely scrap the use of the estimated billing system by the DisCos, describing it as “complete fraud”.
He explained: “Metering is a major challenge in the sector. Consumers must be able to determine how much they pay for electricity through controlled consumption.
“No matter what the government does if meters are not provided, it will come to nothing because the provision of meters is critical for the growth of the sector.
“Many consumers are suffering under the burden of estimated billing which is nothing but criminality. People are issued bills for what they did not consume and this must stop. That is why what the CBN is doing is commendable.
“We want the bank to go beyond just providing the money for the meters and ensure those meters are procured and given to consumers without any charge”, he added.
Speaking on the intervention, PwC’s Associate Director, Energy, Utilities and Resources, Habeeb Jaiyeola, said it remained the right step given the fact that current installed capacity for the generation companies in Nigeria, the inability of the DisCos to completely distribute and collect payment would continue to hinder the ability of the country to fully leverage the installed capacity.
According to him, “Government’s continued support to DisCos will have an overall impact on the sector to facilitate the required progress, adding that the federal government also has equity ownership in the DisCos needs to see to their successes.
“Previous intervention funds have been utilized to settle collection challenges. The plan to use this intervention for infrastructure development is a step in the right direction,” he stated.
Jaiyeola urged the government to clearly outline and monitor the intervention to ensure it achieved projected objectives, adding that the National Mass Metering Programme may need to be checked against some of its set objectives in terms of coverage, availability, and completion time.
On his part, energy expert, Michael Faniran also noted that metering remained critical for the power sector as it would enable the sector to generate enough revenue to address the liquidity gap in the sector.
Faniran explained that without government intervention in bridging the metering gap, DisCos may not show the willingness to end arbitrary billing of consumers.
He explained that there is a critical need for government to support infrastructure development in the sector being also an investor in the distribution link, adding that without the infrastructure that would reduce collection challenges the sector would not be able to fund gas and other links in the sector.