Metering is a vexed issue in Nigeria today as it evokes different sentiments for different people. For some, it is that of frustration at the inability to get one, for others it could be that of doubtful meter reading. Still for some others, it could be an issue of outright non-functionality (damaged) or need for a replacement that is not forthcoming. For whatever reason, it is all a catalogue of woes, depicting an electric utility system that has failed in one its innate reasons for existence: revenue for sustainable operations.
The production of electricity involves four main discernible systems; fuel to power supply systems (for non-renewable energy sources), electricity generation systems, and transmission and distribution networks. The only source of revenue to sustain the entire value chain is through the distribution sector where the finished product is served to and paid for by the customer. It is when the customer pays the right amount for energy consumed, regularly and promptly, that the system can be said to be sustainable. For this to happen, the distribution sector has to have in place, an effective and efficient revenue protection scheme that ensures reconciliation of all the energy that flows into the system. Pre-requisites for this are adequate customer metering and service delivery primed for effective and efficient service (a happy customer is a paying customer). The aforementioned places the distribution sector at the heart of sustainable operations of any electricity supply system.
Metering therefore clearly stands out as that singular most important component in the commercial regime of any power distribution system. The Nigerian experience in sustainable electricity supply has been woeful. The issues beleaguering the sector can be summed below as;
- Uncoordinated development of fuel to power supply system that always threaten planned power generation growth,
- Inadequate power generation facilities,
- Lacklustre transmission services that is not in tandem with planned power generation growth,
- Inefficient distribution services with a record-breaking combined technical and commercial losses in the range of sixty percent (60%).
Sadly, the meagre supply available for distribution, amidst all the technical inefficiencies, is yet further fritted away in the form of avoidable commercial losses at the distribution level due to poor or inadequate metering infrastructure.
Contributing to the perpetuation of this malaise was the then government ownership of the entire power supply value chain where customer rights were non-existent. Throughout the period of state ownership, commercial viability was not emphasised as the utility consistently benefited from government subvention to augment operations. During this era, accountability was a distant feature in the operations of the utility. Metering was an accessory, gratuitously given to favoured customers usually under questionable circumstances rather than as a critical operational element for sustainability. Then, it was a case of priority reversal, where the customer clamoured for meters rather than the utility striving for total and adequate metering. Metering was thus more valuable to the customer than the utility. The reason for this is not far fetched; the customer needed a means of checking the incessant sharp practice of over-billing on the part of the utility.
How can we get right?
Some of the factors that led to the huge metering gap we have today are;
- Government ownership of all aspects of the power supply value chain
- Lack of investment in the sector
- Heavy dependence on government subventions
- Lack of accountability
- Uncensored estimated billing practice (usually favouring the utilities as means of shoring up revenue when threatened with reduced subsidies from the government)
- Lack of any form of regulation (technical, commercial and operational)
The clamour for improved service delivery in the power sector led the government to pursue rigourously the privatisation agenda that has resulted in the privatisation of the generation and distribution sub-sectors within the electricity supply value chain. The privatisation initiative ostensibly was to enable the injection of efficiency and accountability, factors that the private sector are typically associated with. It is therefore expected that a privatised environment in the power sector will;
- Provide the necessary regulatory environment that will ensure compliance on technical, commercial and all other operational issues associated with the day to day operation of the sector
- Obviate the influence of government in the operations of the sector
- Attract the much-needed investment in the sector
- Improved accountability arising from the new private ownership structure of the sector
- Improved service delivery.
In the newly privatised environment, the role of the regulator is critical in ensuring the development and enforcement of a regulation on metering that will guide and ensure compliance by the distribution companies on customer metering. Also, the regulator is expected to enforce the regulation on estimated billing to ensure that all instances of estimated billing are phased out within stipulated timelines. Therefore, the crucial role of the electricity regulation agency in guaranteeing adequate metering will be to;
- Develop effective regulation on metering
- Develop a fair and equitable estimation methodology which ensures that energy estimation is responsive to actual energy supply situation and is tightly associated with consumption capacity of the customer billed.
- Develop a practical regulation on timelines for complete customer metering
- Implement stringent enforcement of all regulations
From the above, the critical role the regulator plays becomes evident, not just in ensuring closure of all metering gaps but also in the success of the entire electricity sector. Therefore the success or failure of the Nigerian experiment in privatisation of the power sector, is largely dependent on the independence and ability of the regulator to develop and enforce regulations that instils discipline in the sector.