August 25, (THEWILL) – The fate of Nigeria’s electricity consumers under the estimated billing system is shrouded in uncertainties following the astronomical increase in the cost of electricity meter.
Estimated customers refer to the system of arbitrary charging against unmetered electricity consumers for the volume of energy they did not actually consume. The billing is based on perceived pattern of consumption, or on the ‘best of judgment’, with unjustified high revenue targets as the motive. Consumers in this system are mandated to pay far above what they consumed on a monthly basis and the charges are usually outrageous
Over the years, the distribution companies (DisCos) have blamed the shortage of meter for their inability to provide their customers with the commodity as a result of which majority of the electricity users are placed on the notorious estimated billing system. The affected consumers, in turn, accuse the DisCos for deliberately starve them of meters in order to continue their arbitrary estimated billing system.
Incidentally, the deregulation of meter pricing has led to a significant increase in meter costs, with some three-phase meters now selling almost at N250,000 as against N80,000 thereby making it unaffordable to an average consumer.
This has raised concerns not only about availability but also affordability, especially for consumers still subjected to estimated billing.
While energy experts agree that this move may help address the metering gap in the country, they caution that it does little to tackle the broader challenges posed by high inflation and the rising cost of living.
The Nigerian Electricity Regulatory Commission’s (NERC) move to deregulate Meter Asset Providers (MAP) was hailed as the much-needed solution to the country’s persistent metering gap crisis, but the high rate of inflation has dampened the euphoria that the arrangement created.
For millions of Nigerians, the sharp rise in metering costs from about N80,000 to over N200,000 in just one year has become as burdensome as the problem it was meant to solve: eliminating estimated billing.
The arrangement was intended to empower customers, allowing them to obtain meters from any approved vendor without relying on the DisCos. While this policy appeared commendable on paper, it has brought new challenges. The most pressing of these is the increase in meter prices, exacerbated by the prevailing economic conditions and rising inflation.
Following the announcement by NERC, DisCos and their meter providers partners have declared new meter prices, pointing to the deregulation policy and ailing economic conditions. None of the new prices is below N100,000, a very sharp increase from the former price announced by NERC in September 2023.
According to the new prices by DisCos, the cost of a single phase meter rose from N81,975 to about N125,000, depending on the DisCo and the vendor the customer is purchasing from.
Different DisCos announced different prices from N120,00 for a single-phase meter to about N240,00 for a three-phase meter, a sharp increase that has made struggling Nigerians question their choices in obtaining meter and estimated billing.
In an ironic twist of events, the number of estimated customers of Nigeria’s electricity distribution companies (DisCos) maintained an upward trend in the first three months of the year (Q1 2024), while the firms recorded higher revenue with less power supply compared with their performance in the equivalent period of 2023.
Estimated customers refer to the system of arbitrary charging against unmetered electricity consumers for the volume of energy they did not actually consume. The billing is based on perceived pattern of consumption, or on the ‘best of judgment’, with unjustified high revenue targets as the motive. Consumers in this system are mandated to pay far above what they consumed on a monthly basis and the charges are usually outrageous
The National Bureau of Statistics (NBS) said in its latest electricity report that estimated customers of the DisCos during Q1 2024 were 6.43 million, higher by 10.22% from 5.83 million in Q4 2023.
According to NBS, on a year-on-year basis, estimated customers increased by 7.88% in Q1 2024 from 5.96 million in Q1 2023.
A look into the NBS electricity reports for 2023 showed that on a year-on-year basis, estimated-billing customers increased by 2.58% in Q2 2023 to 6 million from 5.85 million in Q2 2022
Estimated customers during the 2023 third quarter were 6.03 million, higher by 0.53% from 6.00 million in Q2 2023. On a year-on-year basis, estimated customers increased by 2.02% in Q3 2023 from 5.91 million in Q3 2022.
Estimated customer system has remained a controversy in Nigeria’s electricity sector as a result of the notorious process it entails.
“Estimated billing is a system that thrives on corruption and is driven by tardy inclination to exploitation which defines a commodity in the category of monopoly,” said Gabriel Madu, an electrical installations contractor. While the unmetered customers who bear the brunt of a corrupt and inefficient system bleed, the DisCos, record an increase in their revenue.
Revenue generated in the reference period rose by 17.91% from N247.33 billion generated in Q1 2023 to N291.62 billion. While this could include outstanding debts, the figure shows that the DisCos’ business model earns them a value against the disadvantage suffered by their customers, amid the nation’s unresolved epileptic power supply including frequent national grid collapse.
The country recorded three cases of national grid collapse in the first half of 2024. It also witnessed a national grid collapsed three consecutive times in 2023 – with attendant huge economic losses as the entire nation is thrown into a spate of darkness;
The latest NBS report also showed that the DisCos supplied less energy in the Q1 2024 period when their estimated customers and revenue recorded an increase.
“Electricity supply was 5,769.52 (Gwh) in Q1 2024 from 6,432.22 (Gwh) in the previous quarter. However, on a year-on-year basis, electricity supply decreased by 1.41% compared to 5,851.87 (Gwh) reported in Q1 2023”, the report stated.
THEWILL reports that the Nigerian Electricity Regulatory Commission (NERC) announced on June 21 2024, the approval of N21 billion for the 11 DisCos to provide meters for end-use customers at zero cost.
This comes on the heels of years of exploitation of electricity consumers who waited unavailingly for the supply of meters even after they had made the prescribed payments for the facility yet remained unmetered long thereafter.
Since the Federal Government introduced the metering system in 2018, it has maintained that electricity consumers face no hurdles in procuring meters. But that remains far from being the truth. The DisCos are raking in enormous revenue from poor services while their estimated customers continue to increase and groan.
The latest NBS report showed that Ibadan Electricity Distribution Company (IBEDC) has 1.33 million estimated customers – the highest among the 11 DisCos.
Ibadan also belongs to the league of top four revenue generating DisCos: Ikeja (IEDC) with N52.29 billion, Eko (EKDC) N43.29 billion, and Abuja (AEDC), which raked in N43.22 billion.
The Ibadan zone (which covers Oyo, Ogun, Osun, Kwara and parts of Niger, Ekiti and Kogi states) pooled N27.41 billion to rank fourth during the period.
