Yemisi Izuora
The Central Bank of Nigeria in partnership with World Bank would render assistance to the Electricity Distribution Companies in Nigeria, DisCos, to facilitate government’s National Mass Metering Programme, NMMP, the Nigerian Electricity Regulatory Commission, NERC, has said.
NERC explained that the bridging of the funding gap was as a result of the inability of DisCos to raise the needed fund to support critical investments including but not limited to the metering of customers
The Commission in its consultative paper on the review of Meter Asset Provider, noted that the prevailing absence of cost-reflective tariffs, have adverse impacts on the capacity of DisCos to raise the necessary funding.
It said, “The existence of a huge metering gap and the need to ensure successful implementation of the MYTO 2020 Service-Based Tariff resulted in the approval of the National Mass Metering Programme, a policy of the Federal Government anchored on the provision of long-term low interest financing to the DisCos.”
According to the Commission, metering of end-use electricity consumption is critical to achieving financial viability of the Nigerian Electricity Supply Industry due to its dual benefits of improving customers’ satisfaction and enhancement of revenue recovery by electricity distribution companies.
Apart from providing a transparent and accurate measurement for energy consumed by customer, the Commission said it would also ensures energy accounting and revenue protection for the DisCos.
“The cost of providing meters to customers should ordinarily be included in end-use electricity tariffs as an investment in infrastructure and hence part of the rate base for computation of revenue requirement.
“However, the prevailing absence of cost-reflective tariffs, a contributory factor to the impairment of DisCos’ balance sheets, adversely impacts on the capacity of DisCos to raise the necessary financing to support critical investments including but not limited to the metering of customers,” it added.
