Key Takeaways from the NERC’s Meter Asset Provider Program

The National Electricity Regulatory Commission Meter Asset Provider (MAP) regulations (NERC-R-112) are policy guidelines and regulations developed by NERC to address the persistent challenges around metering access, remove regulatory hurdles and address the highly controversial and contested issue of estimated billing.

In this overview, we present in brief the most important points and cornerstone regulatory policies that are defined by the MAP regulation, highlight the implications for Distribution companies (DisCos), and note possible points of conflict within this framework as designed and implemented by the Nigerian Electricity Regulatory Commission.

One would expect existing Metering Service Providers (MSPs) to take advantage of the regulation to refine their corporate strategy and leverage their existing networks, stake, knowledge, and experience to play important roles in/as part of the new service provider class in the NESI

Keypoints, Cornerstone Regulations, and a New Ground Zero

NERC’s MAP 2018 regulation is a bold statement of commitment to drive the metering of energy consumers.

  • Closing the Metering Gap

NERC-R-112 retains Distribution companies as solely responsible for “meeting its metering targets as specified by the Commission”. While reporting the estimated gap in metering as 4, 740, 275 metered (out of a possible 7 million customers) on the 31st of December 2017, the new regulation notes that DISCOs are to engage with (not engage in) Meter Asset Providers to meet the metering targets set by the commission.

The NERC regulation also provides for “Eligible Customers” (as defined by the Eligible Customer Regulation 2017), typically high-consumption customers to request for and ensure proper energy accounting.

(c) Nigerian Electricity Regulatory Comission
  • Who qualifies as a Meter Asset Provider?

One major significance of the NERC MAP Regulation 2018 is the introduction of a new class of service providers in the Nigerian Electricity Service Industry (NESI). The new guys in the room?

Enter, Meter Asset Providers.

Meter Asset Providers are defined by the regulation as a person “… that is granted a permit by the Commission to provide metering services which may include meter financing, procurement, supply, installation, maintenance, and replacement.”

The specific steps that lead any interested party to be deemed qualified as a Meter Asset Provider range from the basic (proof of incorporation, tax clearance, and proper financial documentation) to detailed technical requirements and explicit procurement processes.

Permits are approved and issued related to the completion of the procurement process with a Distribution company and a valid for 15 years effective front the date of approval.

  • A boon for local MSPs?

One key point in NERC’s MAP Regulation 2018 is related to local content. The regulation specifies that a minimum of 30% of their contracted metering volumes is sourced from local meter manufacturing companies in Nigeria. This reflects the broader protectionist posture of the Nigerian government.

One would expect existing Metering Service Providers (MSPs) to take advantage of the regulation to refine their corporate strategy and leverage their existing networks, stake, knowledge, and experience to play important roles in/as part of the new service provider class in the NESI

Amongst others, the MAP Regulation 2018 sets out in detail, the rights and obligations of MAPs and Distribution companies to each other and between the customers. As well as establishing the rights of Distribution companies to access and use customer data for monitoring, billing, and planning purposes.

Another key part of the MAP regulation is the prohibition of self-dealing. Put simply, this piece of regulation prevents Distribution companies, their core investors, directors, and relatives from setting up, holding shares,  being directors in, or holding senior management positions in the MAP program. The provision is absolute and does not make any allowances for disclosure notices whatsoever. It is very useful in terms of preventing political fallouts and inefficiencies that self-dealing is prone to.

  • Estimated Bill Capping

Distribution companies have taken issue with the directive citing sharp increases in import duties and “wrong pricing”.

Tucked away in the miscellaneous section is one of the most significant part of this 2018 regulation. To quote Dr. Usman Arabi, Head, Public Affairs Department of the NERC, “The regulation is expected to fast track closure of the metering gap and encourages the development of independent and competitive meter services in the electricity industry.”

The section in question says, “The Commission shall within 120 days of the commencement of these Regulations issue an Order on the capping of the bills of unmetered Customers to address the issue of estimated billing in NESI.” This significant, and bland statement has elicited varied responses from both DISCOs and electricity customers since it was implemented on the 20th of February, 2020.

Put simply, the Order on the Capping of Estimated bills in the Nigerian Electricity Supply Industry limits how much DISCOs can charge energy unmetered consumers. As expected the Distribution companies have taken issue with the directive citing sharp increases in import duties and “wrong pricing”. As recently as the 9th of July, a ThisDay newspaper report quotes DISCOs thus, “Given NERC’s previous approval period of three years under the MAP regulation, Discos propose capping to be introduced after massive metering rollout over the next 18 months and NERC should work with Discos to improve the methodology on estimated billing.”

That section and the furor it has caused underscores the blame-game that has plagued Nigeria’s vertically integrated electricity supply sector.

The Grey “In-betweens…”

Despite how broad the regulations are, there are a few lapses worthy of review. Amongst them are lighter issues like the lack of explicit definition of terms and phrases like meter assets, metering services, etc. Worthy of note is the absence of any section addressing the effect of the MAP regulation in already existing contracts between DISCOs and Metering Service Providers. These and other lapses in the NERC MAP Regulation 2018 constitute grey areas that in the interest of smooth implementation and enforcement of the regulation, should be addressed.

The MAP Regulation is not a silver bullet and whether it will as much as make a dent in Nigeria’s electricity supply industry is dependent on the enforcement of the relevant sections of the regulation. And enforcement, as it were, determines and also depends to a large extent on an overall improvement on every front of Nigeria’s power sector.


Featured image by Yung Chang on Unsplash

Related post