NERC proposes new initiative for MAP, NMMP run concurrently

Nigeria Electricity Regulatory Commission (NERC) has proposed an initiative that will enable electricity customers who could not wait for deployment schedule of meter under the National Mass Metering Programme (NMMP) to buy meters under the Meter Assets Provider (MAP).

The regulatory agency, said customers in this category shall continue to have the option of making upfront payments for meters which will be installed within a maximum period of ten working days.

This was contained in a Consultation Paper on the Review of the MAP Regulationssigned by the NERC Chairman, Mr. Sanusi Garba.

Garba noted further that, the option was to allow the implementation of both the NMMP and MAP frameworks to run concurrently.

According to the document, option one is “To allow the implementation of both the NMMP and MAP frameworks to run concurrently. This option envisages a comprehensive metering program that takes advantage of both MAP and NMMP frameworks in fast-tracking meter roll-out.

“It recognises the MAP framework on a robust regulatory framework with significant level of success in meter roll out, though adversely impacted by extraneous factors.

“Under this option, therefore, the proposal is to leverage on the structure of the NMMP to mitigate the identified challenges of MAP while preserving the core function of the MAPs. Under the concurrent framework all customers are expected to pay their bills without any specific reference to metering charge.

“The metering component shall be embedded in the energy charge. The payment framework under the MAP-NMMP concurrent implementation option shall require all customers on the same tariff classification in a DISCOs to pay a uniform energy tariff that includes a metering cost that would enable DISCOs recover the cost of meter and other associated expenses for the repayment of the NMMP facility and the services provided by MAP.

“The repayment of the NMMP facility would be a second line charge against DISCOs’ monthly collections in accordance with the term sheet for the financing. This option recognises the continued role of MAPs and the DISCOs while strengthening the securitisation of payment to MAPs through a third line charge against the DISCOs’ monthly revenues.

“This option maintains all other provisions of the Meter Service Agreement(“MSA”) except where both parties choose to make amendments to the agreements. The MAPs are thus required to make arrangements for the procurement, financing, delivery and installation of meters in line with approved deployment plans and the MSA.

“Customers who choose not to wait to receive meters based on the deployment schedule of the NMMP shall continue to have the option of making upfront payments for meters which will be installed within a maximum period of ten working days. Such customers shall be refunded by the DISCOs through energy credits.

“However, it is imperative to note that this option is an exception as all MAPs are required to deploy meters in accordance with the agreed meter roll out plan and consistent with the MAP framework. There shall be no option for meter acquisition through the payment of a monthly meter service charge.

“In the determination of rates payable by customers, the Commission shall take into account the blend of “cost of debt” on account of the concessionary financing to DISCOs under the NMMP. The adjustment will include a blend of NMMP meters with a 9% cost of capital and MAP meters with a different cost of capital.

“It is proposed that the meter assets paid upfront by customers under the current structure of the MAP regulation be recognised in the rate base of DISCOs and the cost is refunded to the customer through energy credits.

Customers will be compensated through one-off energy credits equivalent to the value of the meter.

Where meters have already been deployed under the meter service charge (MSC) option, DISCOs shall make one-off repayment to affected customers and associated MAPs.

“Such meters shall be recognised in the rate base of the DisCos.The meters procured by a DISCOs under the NMMP scheme shall be deployed by approved meter service providers (MSPs) or through MAPs based on new contractual arrangements

On the merit of concurrent implementation of the MAP and NMMP frameworks: the Commission argued that “Preservation of the MAP framework which has started yielding results–a total of 611,231meters have so far been installed under the MAP framework despite the extraneous challenges to its implementation

“The MAP framework is further strengthened by the securitization of payment obligation of DISCOs, amendments to the MAP Regulations are minimal thereby preserving regulatory certainty.

“Provides broader financing options from both schemes rather than relying solely on the CBN funded NMMP. The concurrent implementation option enables faster closure of the metering gap with the two streams complementing the meter roll out.

“There is clarity in the tariff structure with customers metered under the MAP framework receiving refunds through energy credits. Clear payment structure for MAPs through a third line charge against DISSCOs’ collections including repayment of meters installed under the framework of a monthly meter service charge;

“A concurrent implementation of the MAP and NMMP framework is likely to create more jobs especially in the area of meter assembly and installations.”

Garba said, “NERC has prepared this document to facilitate as open consultation as possible and has provided the merits and demerits of the proposed changes as well as the potential impact of the changes on the MAP Regulations 2018.

“Therefore, and accordance with the Business Rule of the Commission, stakeholders are expected to provide comments, objections, and representations on the proposed amendments within 21-days of this publication.”