35 percent import levy halts mass meter rollouts for electricity consumers ─NERC

*Regulator says its plan to use an improved supply framework to reduce the number of unmetered power consumers largely stalled by the government’s new import tariff

Isola Moses | ConsumerConnect

The Nigerian Electricity Regulatory Commission (NERC) has said if not for the Federal Government’s sudden introduction of 35 percent additional tax on imported meters, electricity consumers in the country who do not have meters may have got them.

The electricity regulator in a report disclosed that its plan to use an improved supply framework to reduce the number of unmetered power consumers has been largely stalled by the government’s import tariff.

The NERC explained in its first quarter 2020 operational report on the Nigeria’s much beleaguered power sector, that the agency’s Meter Assets Providers (MAP) framework which sought to improve meter deployment, reduce estimated billing and expand revenue collection capacities of the 11 electricity Distributions Companies (DisCos) had suffered a deployment setback with the government’s new import levy.

Accordingly, the regulator stressed that 59.61 percent of Nigerian registered electricity consumers are still on estimated billing.

This development, according to NERC, largely contributes to consumer apathy towards payment of electricity bills in the country.

The agency also noted that in the quarter under review, N3.88 out of every N10 worth of energy sold by the DisCos remained uncollected from consumers, which by implication, means that availability of electricity meters could have helped to limit the collection losses of DisCos.

It is recalled that March 2018, the NERC introduced the MAP framework to fast-track the roll-out of end-user meters through the engagement of third-party investors for the financing, procurement, supply, installation and maintenance of electricity meters.

The regulatory agency also approved a number of companies that met its regulatory benchmarks as participants in the scheme.

Its report noted that “although the effective meter roll-out date started in May 2019, the performance has been below targets due to a sudden introduction of a 35 percent additional importation levy imposed by the Federal Government on fully assembled meters.”

NERC “is currently working with the Federal Ministry of Finance, Budget and National Planning to address this major challenge.

“A case has been made by the commission for a deferral of the new import levy to allow for the roll out of meters under the framework of the MAP Regulation,” the report said.

The regulator further stated that the sector’s financial challenges are still huge and delaying its progress.

Niger, Benin and Togo who owed Nigeria $13.22 million debt for electricity supplied to them within the quarter paid only $6.66 million to it, NERC report said.

ConsumerConnect reports President Muhammadu Buhari, in August 2020, approved a one-year waiver of import levy on electricity meters in order to help improve Nigeria’s electricity meter deficit.

In a tweet via its verified Twitter account PresidencyNigeria@NGRPresident August 25, 2020, the Federal Government stated that the import levy is a big deal in Nigeria’s electricity industry, citing the Meter Asset Provider (MAP) Regulation of the Nigerian Electricity Regulatory Commission (NERC) in 2018.

It equally disclosed that NERC had ordered a cap on how much DisCos can charge unmetered consumers, as part of efforts at tackling ‘estimated’ billing in the power sector of the economy.

According to the Presidency, the new regulations would be in line with its commitment to support Nigeria’s electricity reforms and the NERC’s Meter Asset Provider (MAP) scheme.

In 2020, Nigeria’s electricity metering deficit rose to 6.75 million, from 4.5 million in 2015, said the government.

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