Estimated Billing came to life when the NIGERIAN ELECTRICITY REGULATORY COMMISSION (NERC), in the exercise of the powers conferred upon it by Section 96 the Electric Power Sector Reform Act, 2005 and all other powers enabling it in that behalf, the Nigerian Electricity Regulatory Commission hereby establishes the following Regulation on METHODOLOGY FOR ESTIMATED BILLING, 2012.
The Methodology further stated the objective as below
“Objective of the Methodology
This Methodology is to provide for the standardization of the method used by Distribution Companies (Discos) to estimate a Customer’s power usage and bills accruing thereby in instances where the Disco is unable to read the Customer’s bill within a billing period.
This Methodology also provides for the standardization of the indices to be considered by Discos in estimating the power usage of a Customer connected to the electricity system without a meter.”
In 2012, barely a year into the power sector reform, deluge of complaints on excessive estimated billing got to the Regulators, who in turn directed that the newly privatized Distribution Companies organize workshops for their staff to educate them on the processes of calculating accurate “Estimated Billing”
Ever since then, the wheels have all gone off the train, and it has been catastrophic downhill trend.
Going by the Objectives for the setting up of the billing methodology, “Estimated Billing Methodology” was aimed at serving Customers whose Meters could not be read within a certain period, or Customers connected without Meters.
Estimated Billing was NEVER meant to be a permanent feature of the Billing Methodology, but a stop gap for extenuating circumstances which may arise within a certain period.
As we have said on several occasions at PowerUp Nigeria, there is a certain disconnect between the Regulatory Organization, NERC, and the laws to which they pledged an oath to.
News headlines, and Daily Customer Complaints has been awash with cases of Estimated Billing, and apparently, members of the National Assembly has been directly affected by the shenanigans of the Distribution Companies, and this has elicited a reaction from the House of Representatives: Criminalizing Estimated Billing.
While the effort to respond to people’s problems by the National Assembly is highly appreciated and commendable, going to the extreme is NOT the solution.
Bill to Amend the Electric Power Sector Reform Act 2005, as sponsored by Hon. Femi Gbajabiamila, can be summarized as follows:
- Amend the EPSR Act to expunge totally, Estimated Billing Methodology as obtained in the Electric Power Sector Reform Act 2005
- Criminalize issuance of Estimated Billing To Electricity Consumers,
- Enforce the installation of Prepaid Meters to ALL Customers “irrespective” of their classification
Again, we have to commend the leadership of the National Assembly for coming up with such thoughtful moves at checkmating an impotent Regulator in NERC, and capitalist Sharks in the Distribution Companies.
However, the picture is bigger than just Distribution companies and the regulators, and giving little respites to Consumers. We will be cutting off our noses to spite our faces. On the long term.
Let us continue to look at the possible effects on the Nigeria Electricity Supply Industry itself.
The actual Power Sector Reform is still less than 10years old, some of the Distribution Companies would be ending their first 5year phase by November 2018. The Industry Reform is still in its infancy.
The primary issue here is the Metering Gap, which presently stands at well over 50%, and this is still for an estimated 6 Million registered electricity consumers.
The Credited Advanced Payment Metering Implementation, CAPMI, was explored at one point to close up the Metering Gap, but unconfirmed sources claimed that the Distribution Companies kicked against CAPMI, and they demanded that NERC scrapped the initiative. Whether this was true or not, CAPMI was scrapped just before the new owners took over in November 2013. The problem persists.
One of the expected deliverables by the Distribution companies was the closure of the Metering Gap within 3 years of taking over. This also fell through as NONE of the new owners could muster enough money to meter their Customers.
A case in point is the Ibadan Electricity Distribution Company, whose monthly revenue is roughly three billion naira (N3bn), which gives us about N36bn annually. They would need over N9.4bn to meter 800, 000 customers within that same year.
The argument still remains. With the Government retaining circa 40% in each of the Distribution Companies (They have not appointed Board Members into any of the Discos, sadly), and the inability of the Investors to muster enough funds as they have promised, would it not be proper for us to be looking at “reforming” the Power Sector Reform itself?
Criminalizing Estimated Billing, or any other part of the Sector for that matter, is definitely NOT the way forward.
PowerUp Nigeria, a civil society non-governmental organization has spent over 2years advocating for the licensing of independent metering service providers, but the Ministry of Power, Works and Housing, the Regulators, NERC, has found a way to water down what promised to have been the panacea to the Massive Metering Gap in the released Metering Asset Providers Regulation.
What the National Assemble should do at this point is to:
- Review the Metering Asset Provider Regulation
- appoint an adhoc committee from the National Assembly itself to oversee the immediate implementation of the MAP regulation as released, or
- Appoint civil Society Organizations across Nigeria to oversee the licensing and appointment of MAPs.
Criminalizing Estimated Billing, or ground standing by any parties involved will only continue to bar negatively on the Nigeria Electricity Supply Industry, as Foreign Investments required will continue to be elusive, as no Foreign Investor will have enough confidence in the market so as to put in their funds.
As seen from the Objective of the Estimated Billing Methodology-as quoted at the beginning- The Estimated Billing Methodology foresees a scenario and actually made provisions for it. It should not be taken away from the Methodology.
It is a different case where the Regulators and Discos chooses to bastardize and disregard the provisions made for Estimated Billing.
Cutting the Head is definitely NOT the solution to Headache. Criminalizing Estimated Billing is NOT the solution to a problem which the root cause was not Estimation of Bills.
Lastly, The National Assembly will do well in putting pressure on both the Federal Government and NERC, to do what is right. This is also on the assumption that what they set out to do originally is to really find a solution to the cries of Nigerians.
The Nigeria Electricity Regulatory Commission was setup as a gateman, or referee for the Power Sector Reform. But as always, it has been the “Voice of Jacob, and the Hand of Esau” with them. NERC has spent more time speaking for, and defending the Distribution Companies, even when they have failed, than actually finding solutions to the myriads of challenges plaguing the power sector.
This came to the fore also with the presentation they made at the Public Hearing on June 5th, so much so that Hon. Femi Gbajabiamila had to call their attention to it right there.
We beseech the National Assembly to put more pressure on NERC to deliver on their basic assignment for which the Electric Power Sector that sets them up has empowered them to do.
This way, the National Assembly will be contributing effectively and positively, using policy feedback to ease the cries and pains of every Nigeria, without turning the apple cart.