Electricity metering: NERC orders DISCOs to refund customers

The Nigerian Electricity Regulatory Commission, NERC, has directed customers to seek refund in form of ‘Energy Credit’, spanning a period of three years, from Electricity Distribution Companies, DISCOs, for prepaid meters purchased under the Meter Asset Provider (MAP) scheme.

The electricity regulator indicated that the directive was in compliance with the national mass metering regulations 2021.

The Order No: NERC/2023/001, which was obtained by Vanguard, was signed by Chairman of the Commission, Sanusi Garba and Commissioner, Legal, Licensing & Compliance, Dafe Akpeneye.

The order is coming at the backdrop of the recent upward review of the prices of the single-phase and three-phase meter which rose to N81,975.16 from N58,661.6, and N143,836.10 from N109,684.36 respectively.

The new directive titled, ‘Order on the Reimbursement Meter Cost,’ stated that pre-paid meters have an average usefulness of 10 years.

NERC, in the directive, stated: “The Meter Asset Provider and National Mass Metering Regulations, 2021 (the Regulations) Section 8(f) provides that Distribution Licensees are obligated to reimburse customers who pay for meters under the MAP framework through equal installments of energy credits, at the time of vending, with the cost of the meter amortised over a maximum period of 36 months.

“Section 24(1) (b) of the Regulations provides that where a Customer elects to make upfront payment for meters under these regulations, the cost of the meter shall be refunded through energy credits by the distribution licensee.

“The reimbursement schedules shall be as approved by the commission, having regard to an evaluation of the financial standing of the distribution licensee. This provision also applies to upfront payment made by customers upon commencement of the MAP framework in 2018.

“The Commission conducted an evaluation of the financial standing of the DISCOs which resulted in a review of the hitherto 36-months reimbursement period.”

NERC explained that the order seeks to ensure fairness, transparency and accountability of the metering process under the MAP framework, adding that it provides a fair mechanism for the reimbursement of meter costs to customers under the scheme.

It added, “The Order also aligned the amortizations period for reimbursement with the 10 years average useful life of electronic meters. It also aligned the amortisation period of the cost of MAP meters with the repayment of the concessionary tenor of other financing sources for metering and recognise meters installed under the MAP framework in the Regulatory Asset Base (RAB) of DISCOs.”

The regulator maintained that it imposed the regulations as an obligation on the DISCOs to reimburse customers that paid for meters under the MAP scheme through equal installment of energy credit over a 36-month period.

However, it added that the cost of the prepaid meter paid by the customers under MAP shall be amortised over 120 equal installments and reimbursed through energy credits computed based on the prevailing tariff at the time of vending.

It stated that, “Where a customer does not vend in a given month or months, the DISCOs shall at the point of the next vending, refund the accumulated energy credits due to the customers for the period not vended. Where a postpaid customer purchased a meter under the MAP framework, the reimbursement by the DISCO shall be in the form of a rebate on customers.

“The DISCOs have, therefore, been advised to file monthly reports with NERC containing a breakdown of the total monetary value of refunds to customers through energy credit in accordance with the Commission’s prescribed template.

“The Order further emphasised that the whole meter installed under the MAP framework shall be included in the Regulatory Asset Base, RAB, of the DISCOs by the commission at the next major or extraordinary tariff review.”