Daily Insight: The Nigerian Power Sector – 100% metering or nothing?

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Recently, the Nigerian Electricity Regulatory Commission (NERC) published its quarterly report on the performance of the Nigerian electricity sector for Q1-2018. Unsurprisingly, financial illiquidity; traceable to non-cost reflective tariffs, high T&C losses and estimated billing, remains the biggest threat to sustainability.

Daily Insight: The Nigerian Power Sector - 100% metering or nothing? - Brand Spur

Further inspection suggests that electricity billing collection efficiency among Distribution Companies (DISCOs) stood at 62.3% (N106.6bn recovery vs. N171.1bn customer bill) while remittance to the Nigerian Bulk Electricity Trader (NBET) was 31.4% (N51.2bn settlement vs. N163.1bn invoice by NBET)  in Q1-18. However, the most telling revelation from the report relates to metering end-users. By the NERC’s reckoning, while the total number of registered customers stood at 8.1million, only 42.2% of the registered customers were metered as at Q1-18. Improving collection efficiency, therefore, hinges on 100% metering of all end-users.

To bridge the metering gap, the NERC has launched the Meter Asset Provider Regulations (MAPR) with the overarching objective of eliminating the estimated billing system. Meanwhile, the continued usage of estimated billing system has led to a rapid increase in the size of the receivables in the books of the DISCOs. While the sector remains in dire need of further reforms, we maintain the view is that 100% metering is critical to unlocking opportunities across the value chain.

 

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