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NERC may sanction Discos over hike in cost of meters

By on March 18, 2015

The Nigerian Electricity Regulatory Commission (NERC) may sanction the electricity distribution companies for increasing the cost of electricity meters without the regulatory agency’s approval, THISDAY has gathered.

The distribution companies had increased the cost of acquiring prepaid meters by customers, citing the recent devaluation of the naira by the Central Bank of Nigeria (CBN).

With the hike, a single-phase meter now sells for N39,375, against N25,000 it was sold before the CBN devalued the currency.

The three-phase meter, which was sold for N50, 000 before the apex bank devalued the nation’s currency, now goes for N60, 909.

The hike in the cost of the single-phase meter by 56 per cent, and that of the three-phase meter by 20 per cent was blamed by the discos on the devaluation of the currency.

Most of the meters in the Nigerian electricity market, it was learnt, are imported as the industry is yet to fully patronise local manufacturers of meters.

THISDAY gathered that with the devaluation of the naira, the rising exchange rate has posed serious challenges to the importers of electricity meters.

Local manufacturers, some of whom currently assemble the different imported components locally also face similar challenges.

But electricity consumers have expressed concerns that the hike was not commensurate with the devaluation of the naira.

According to them, though the devaluation was enough reason to increase the cost of imported goods, it should not warrant the increase in the costs of single-phase and three-phase meters by 56 per cent and 20 per cent, respectively.

Responding to the development, the Chairman of NERC, Dr. Sam Amadi told THISDAY that the agency did not approve the increase in the cost of meters by the distribution companies.

On whether the regulatory body would consider sanctions for the erring distribution companies, Amadi said: “We (NERC) sanction when a violation is reported to us.”

Prior to the hike in the cost of meters, NERC had mandated the electricity distribution companies to commence implementation of the Credited Advance Payment for Metering Implementation (CAPMI), in view of the slow pace of customer metering by the DISCOs, as well as the high level of complaints received from customers over high estimated billings.

According to NERC, “CAPMI provides a platform for willing customers to pay the cost of the meter into a dedicated account jointly managed by the DISCO and meter vendor/installer”.

Under CAPMI, once payment has been effected, the customer will have their meter installed within 45 days, by a NERC accredited Vendor/Installer.
Amadi had explained that “The cost of the meters was arrived at using the standard market price plus the most efficient installation costs”.

“The DISCOs submitted data based on costs submitted by the DISCOs during the MYTO review, as well as review of prices supplied by local manufacturers,” he added.

In arriving at a list of meter vendors and installers of meters to partake in the CAPMI scheme,  Amadi said NERC followed a comprehensive due process by first advertising, and inviting the Bureau of Public Procurement (BPP) to supervise the process of certification based on the Metering Code.

 

[ThisDay]