Review Of The Salient Provisions Of The Meter Asset Provider Regulations 2018

Agreements between Parties

Under the MAP Regulations there are two (2) main agreements that must be executed by the relevant players along the value chain.

  1. Metering Service Agreement (MSA): This is an agreement entered into between a DisCo and a MAP for the provision of the relevant metering services; and
  2. Service Level Agreement: This is a contract between the MAP and DisCo, which defines the level of service that the DisCo expects the MAP to provide to its customers.

In the main, the rights and obligations of parties cut across vital issues, which include:

  • access to customer meters installed by MAPs;

  • use of data derived from customer meters for monitoring;

  • billing and planning;

  • development of meter-deployment plans;

  • payment of metering service charge by electricity customers;

  • legal ownership of the meter asset until fully amortized through payment of a metering service charge by beneficiary customers;

  • meter asset specifications and installation standard;

  • periodic inspection of meters to ensure integrity and reading accuracy;

  • repair and replacement of faulty meters;

  • key performance indicators (KPIs) for MAPs as agreed between parties;

  • safety of installed meters within the customer’s premises;

  • willful damage to meters; and

  • transfer of services within a franchise area.

Prohibition of Related Party Transactions

To ensure good corporate governance and the integrity of processes, the MAP Regulations prohibit a DisCo, its core investors, subsidiaries, affiliates, directors and their relatives from setting up, owning shares or holding directorships and senior management positions in the MAPs.

Insurance and Disaster Recovery Plans

Under the MAP Regulations, it is the obligation of the MAP to insure the meter assets and secure all metering equipment deployed in accordance with the Metering Service Agreement (MSA) while the DisCo and the MAP are jointly obliged to ensure frequent back-up of relevant data, to ensure integrity of the metering system.

Capping of Unmetered Customers Bills

To address the issue of estimated billing in the NESI, the MAP Regulations provide that within 120 days of its commencement, NERC shall issue an Order on the Capping of the Bills of Unmetered Customers.

Customer Financing of Meters

Another significant initiative in the MAP Regulations is the provision for self-financing of meter acquisition by electricity customers, who elect to pay for a meter asset upfront. In this case:

  1. a DisCo shall provide the customer with authorization specifying the amount to be paid for the installation of a meter, after inspection of the customer’s premises and certifying the readiness of the premises for a safe and secure installation of the meter asset;

  2. the customer shall pay to the MAP the full price of the meter as specified in the DisCo’s authorization; and

  3. the MAP shall supply and install the meter at the premises of the customer within ten (10) working days of the Customer’s full payment.

Under the customer financing arrangement, a customer shall not be liable for the payment of metering service charge through the DisCo, and the amount payable to the MAP by the customer shall be the efficient costs of the meter and its installation, as determined by the procurement process for MAPs conducted by the DisCo.

Dispute Resolution

All agreements entered into by parties further to these Regulations shall contain appropriate dispute resolution clauses for settlement of disputes by arbitration.

 

CONCLUSION

The development and issuance of the MAP Regulations indicate the commitment of NERC to using its rule-making powers under the Electric Power Sector Reform Act (2005), to address critical challenges affecting the Nigerian power sector.

Essentially, the MAP Regulations make transitional arrangements to the effect that, pursuant to the tariff reset in the year 2018, only meters installed by DisCos by December 31, 2018 shall form part of their Regulatory Asset Base.

Furthermore, any further deployment of meters beyond December 31, 2018 under a subsisting contract entered by DisCos is to be structured under the MAP regulatory framework. Again, customers who are provided with meters under this arrangement are to pay a monthly metering service charge and appropriate energy tariff reflective of the financing structure while DisCos are expected to present to the Commission for approval, additional customer classes disaggregating customer tariffs, based on the mode of financing of the meter asset that are installed on their premises.

Whilst figures released by NERC indicate a metering gap of 4,740,275 meters for all DisCos as at December 31, 2017 (with the gap projected to widen significantly by the time the ongoing customer enumeration in the NESI is concluded), it is expected that the operation of the MAP Regulations will bridge the metering gap and eliminate the billing crisis currently ravaging the NESI.

 

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