Can Nigeria meet metering target?

Guardian Nigeria

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00:00Nigeria's presidential metering initiative is still on course with a sum of 700 billion

00:06naira set aside from the federation account for the implementation of the distribution

00:12of free electricity meters under the initiative. Now that's according to the special advisor to

00:17the minister of power on strategic communications and media Bolaji Tunji who says two million meters

00:23expected every year and the delivery of the first batch will start by the first quarter

00:29of next year. Meanwhile Nigeria's senate has also begun to probe into the activities

00:33of generation companies the transmission company of Niger as well as discos for inefficiencies

00:38recorded since the privatization of the sector. George Otomi, the founder of George Otomi and

00:45partners joins me now for more on these discussions. Mr Otomi thanks a lot for joining us on the show

00:50today. Now the mindset around closing the metering gap is all about understanding this will continue

00:56to remain a shifting target. Let's have your take on the performance we've seen from the different

01:02metering plans, the strategy involved and how this narrows down into the sort of prospects and what

01:07might likely pan out for this presidential metering initiative which is targeting about

01:11two million meters annually and expected to kick off by the first quarter of next year.

01:17Thank you very much David and compliments of the season. Metering goes to the heart of

01:24the distribution business because it's that's what creates trust between the consumer and the

01:31utility company and it was always recognized from the onset of the privatization that the

01:38metering gap needed to be closed. Now it was also discovered that on account of the unrealistic

01:47tariffs there was no way the distribution companies could carry the burden of free metering

01:54as it were. So the regulator introduced what they call the CAPME. This was one of the methods,

02:03Accredited Advanced Payments Metering Initiative which enabled the DISCOs to allow customers to

02:13pay in advance for their meters and then slowly credit them back. That was the whole idea behind

02:20it and if you ask me when privatization took place CAPME was working but then inexplicably

02:30that was then changed to map the meter asset provider regime. This time it took metering

02:38out of the hands of the distribution companies and put them in third party meter provider's

02:45hands. They work with DISCOs to provide meters. In a sense it removed the primary responsibility for

02:54metering from the DISCOs and that's the regime we still have today. Map is struggling and it's

03:01struggling again on account of unrealistic meter pricing. In fact there was a time,

03:08for a long time metering was halted because the maps did not agree with the regulator

03:15on what a fair price would be given the entire macroeconomic circumstances we have,

03:21the collapse of the Naira, the FX exchange rates and all that affected like every other commodity

03:28at the price of meters. So coming now the Federal Government's Presidential Metering Initiative

03:34which is then designed to roll out meters as rapidly as possible. It's a very welcome initiative

03:43and as has been announced by the ministry it will add about two million meters per quarter. I hope

03:50that target can be met but the whole idea behind that is that the meters should be rolled out

03:56given to customers as it were for free and any adjustments can take place. The idea being that

04:03the metering gap which currently continues to expand because as you meter people more

04:12more customers come onto the networks and then you also need to replace

04:16agent meters. I'm sure you've heard about the Unistar meters which some DISCOs want to change

04:25on account of the new international metering standard, the STS standard that requires that

04:32all meters should conform with this standard because it helps give what they call revenue

04:38assurance and gives comfort to the consumer that he's actually being charged what he is consuming.

04:47Well Mr Otomi now while we are also looking at prospects ahead now we have the Naira

04:52extending the deadline for meter upgrades to January 2025. Now Nigeria has not necessarily

04:59gotten it right when it comes to registration process and upgrading individuals onto a bigger

05:05platform which has told us to support the efficiency levels we see in the market here

05:10but for you now going with this mindset of putting timelines for upgrades like this,

05:15your take around that and also with the latest fillers we are having from the FCCPC cautioning

05:20DISCOs against flouting the meter replacement directive. Your take on some of these developments?

05:28Well as I mentioned to you there's a global shift to modern metering standards. It's not

05:35dissimilar to what you're finding with the banks who are now upgrading their networks. That's

05:40essentially what DISCOs are doing. They need to upgrade their network to accommodate this new

05:47metering standard and that should be encouraged because like I mentioned to you that's what gives

05:54us revenue assurance. Otherwise we will never put estimated billing behind us. With this metering

06:01standard it must happen. ECODISCO and EKEDJA DISCO have been quite

06:09confident with ensuring that all the meters in their networks conform to the standard. Initially

06:16the date set was November 24 I believe this year but that's now been moved to January just to give

06:24enough time for this cutover. As I speak to you, consumers are being given codes they need to

06:34insert into their present meters. Not all meters require to be changed. Let me make that position

06:39clear. All you need is a code that will then enable you to upgrade to this new standard and then for

06:46the new meters that are being installed they already conform. So it's just essentially moving

06:52away from the analog metering regime to a fully digitized metering regime and that's a welcome

06:59Yes Mr. Otomi, I had a pretty bad experience with that meter upgrade. I tried at least five times

07:04and I had to do a trip out of the country before coming back to face it. So it's quite a hurdle here

07:10and this extension over the timeline definitely is a welcome development. But wrapping up the

07:14conversation, let's talk about the Senate's probe into the DISCOs, GENCOs and then the TCN.

07:20Although what it has termed as the failure of the privatization of the power sector. Now these

07:27are years since the privatization of the sector, yet we are dealing with the same

07:34old issues. For you looking ahead into 2025, do you think we have any gains to cash in from the

07:40privatization of the sector? Certainly, there's a lot of momentum that has happened. I always

07:50like in this whole privatization exercise to somebody who was like 100 feet below the ground,

07:56you've managed to dig yourself to 50 feet. But because you are still below the ground,

08:02people will not know that you've done 50% of the job. Today there's far more knowledge of

08:08how the electricity works than it was before and knowledge is power. Many people, we all talk now

08:15DISCOs, GENCOs, TCN, we all know the interplay. Even if it is just for the democratization of

08:22the knowledge in the power sector, the privatization has been a huge success. But when

08:28you go down to the granular details, I mean, it comes in components. It comes from gas supply,

08:36to generation, to transmission, to distribution. And we now all know that we have a problem with

08:43gas supply in this country. And without gas, most of the thermal plants we provide for 80%

08:50of our electricity will be starting in fits and starts. And when you have a heat cups and

08:56degeneration mechanism, it affects TCN. Now, TCN is the only member of this value chain that has

09:04not been privatized, so fully government. And we can see that it still has all its inefficiencies.

09:10The grid is antiquated. There is hardly any method by which you can troubleshoot for problems,

09:17and so forth and so on. And if the transporter of the electricity does not get into the DISCOs,

09:23how can consumers get light? So when I hear the Senate saying the DISCOs are failed,

09:30and the only way a DISCO can make money is if it gives light to the customer. So it doesn't

09:35make any logical sense for them to have electricity, they are not give it. So they just have

09:41it. You only give what you have. So and then onward, because we are too quick to reversing

09:46and do whatever we like. All these things are contract-based. There are laws already in place.

09:51The new Electricity Act brings states into play. I don't know how you begin to disenfranchise them.

09:58And then of course, this matter could deteriorate to legal action, arbitration, and all that. We

10:05don't need that in the sector, otherwise no investment will come in. And this sector needs

10:10new money, which is not here, to come in. So we need to allow an enabling environment

10:15and consolidate on the gains of the privatisation. Those of us who are around know that the banking

10:21revolution didn't happen overnight. There were hiccups, but they kept cleaning it until what

10:26we find today. So what we just require is patience. Okay, what is required is patience.

10:30We'll leave the conversation here for now, Mr Etoome. Thanks a lot for your time in the show

10:34today. That was George Etoome, the founder of George Etoome and Partners.

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