In recent times, a lot has been happening, and rapidly too, in
the Nigerian Electricity Supply Industry (NESI) in terms of
regulations, guidelines, policies, and laws.
Only about nine months ago, the Minister of Power, Works and
Housing announced the Eligible Customer regime, and with it came
much furore from the various value chain participants. Recently, a
new set of Regulations emanated from the industry, the Meter Asset
Provider (MAP) Regulations. Amongst other things, it seeks to
encourage competitive meter services in the industry, close the
metering gap which it estimates stands at over four million meters,
attract private investment and of course, eliminate estimated
billing.
I must commend the regulations, and the firm posture it adopts
in mandating Distribution Licensees to ensure metering for their
customers within a set time period. It is also economically
advantageous, as it, while stretching the NESI value chain, opens
new vistas for investment in the industry from private sector
players. The matter-of-fact tone of the Regulations has ensured
that a carte blanche standard of metering is not adopted where
every Meter Asset Provider (MAP) operates at his behest in terms of
quality, instead it has laid down certain technological benchmarks
for MAPs seeking to participate in the tender process. In addition,
the process for approval seems to be quite well thought out,
commencing with the ‘No Objection’ authorization which is granted
after conducting due diligence, and closely following that, the
procurement process which is audited again by a Tender Auditor
appointed by Nigerian Electricity Regulatory Commission (NERC). The
MAP who has been successful at the bid rounds applies to NERC for a
permit, which is then granted upon fulfilment of all requirements
of NERC. For me, the interface of the public sector and organized
private sector at the back-end of the NESI value chain, meeting at
the intersection of providing value and solving a problem which has
for a long time affected all players along the chain, is a welcome
development, and one that must be extolled. The prerequisite of
ten-year business plan, a meter deployment plan and validated
technical expertise, also work to endeavor that the mistake made
with the privatisation drive, where licenses were awarded without
due regard to expertise, technical knowhow or due diligence does
not repeat itself.
It is equally impressive the high level of transparency
encouraged by the Regulations. The necessity for a newspaper
publication of the monthly metering service charge and detailed
roll out plan evince a system that intends to provide close
monitoring not just from NERC, but from everyday consumers.
Additionally, the alienation of companies for the bid rounds who
have in them any participatory interests from Distribution
Licensees aids the process to be as open as possible, and allows
for licenses to be granted without fear or fervor, if this is
followed to the letter. The clear distinction too, of the metering
service charge from the energy charge and the ring-fencing of the
payment of the metering service charge to a dedicated account from
which payouts will be made to the MAPs is a step in the right
direction. The local content provision is creditable too, as it
will help for growing our local industry.
The requirements for MAPs to acquire insurance and the mandated
securitization framework for Distribution Licensees are very
laudable steps that will ensure the financial sustainability of the
metering drive. It is a value-add too, that under the Regulations,
the rights and obligations of all players in the metering activity
are outlined, with the end-user being assured in no mean terms that
he has the right to be metered. Furthermore, the capping of
unmetered customers after a defined period will serve as a
motivation to accelerate the rolling out of meters.
I am worried though, about certain provisions. First, while I
have no bone of contention regarding the length of time as per the
120-day deadline given to the Distribution Licensees for
procurement, my worry is that the ‘Nigerian Deadline’ factor that
has affected every other thing from BVN to National Identity Card
Registration, possibly to the VAID scheme, will arise here again,
and defeat the essence of the provisions under the MAP Regulations.
Perennial excuses like technical glitches, counterparty failure and
late funding are likely to arise at the point where the deadline
looms and the law is to be enforced. The requirement for
several permits where a Meter Asset Provider intends to provide its
services to a string of Distribution Licensees is worrying too. To
my mind, it would be an overly herculean process, and except the
turnaround time for the process is fluid -which is an unduly high
expectation considering the bureaucracy surrounding government
exercises- then investors will also be discouraged by the
repetition of the same process. It would have been preferred if all
that was required was perhaps a No Objection authorization for the
Meter Asset Provider to deal with another Distribution Licensee, or
like upstamping, in property law parlance, the Meter Asset Provider
could only have to obtain an ‘upstamping’ on their permit in order
to deal with a different Distribution Licensee.
With all said, the Regulations have come a perfect time; a time
when electricity consumers have started to ask questions, protest
estimated billing and demand accountability from these privatized
distribution companies. It is hoped that the Regulations will birth
a more efficient distribution regime, attract investors, and aid
the troubling illiquidity in the industry. It is likewise the hope
of the public that the Regulations will live up to its firm and
no-nonsense mandates for all the relevant actors and will
continually demand the highest levels of performance, transparency
and optimal delivery from the MAPs and Distribution Licensees.
Caleb Adebayo is a lawyer with Wole
Olanipekun and Co., where he straddles the busy dispute resolution
team and the nascent commercial team. He is keen on the
intersection of Energy, Finance and Environmental Law. He can be
reached at calebadebayoc@gmail.com
In recent times, a lot has been happening, and rapidly too, in
the Nigerian Electricity Supply Industry (NESI) in terms of
regulations, guidelines, policies, and laws.
Only about nine months ago, the Minister of Power, Works and
Housing announced the Eligible Customer regime, and with it came
much furore from the various value chain participants. Recently, a
new set of Regulations emanated from the industry, the Meter Asset
Provider (MAP) Regulations. Amongst other things, it seeks to
encourage competitive meter services in the industry, close the
metering gap which it estimates stands at over four million meters,
attract private investment and of course, eliminate estimated
billing.
I must commend the regulations, and the firm posture it adopts
in mandating Distribution Licensees to ensure metering for their
customers within a set time period. It is also economically
advantageous, as it, while stretching the NESI value chain, opens
new vistas for investment in the industry from private sector
players. The matter-of-fact tone of the Regulations has ensured
that a carte blanche standard of metering is not adopted where
every Meter Asset Provider (MAP) operates at his behest in terms of
quality, instead it has laid down certain technological benchmarks
for MAPs seeking to participate in the tender process. In addition,
the process for approval seems to be quite well thought out,
commencing with the ‘No Objection’ authorization which is granted
after conducting due diligence, and closely following that, the
procurement process which is audited again by a Tender Auditor
appointed by Nigerian Electricity Regulatory Commission (NERC). The
MAP who has been successful at the bid rounds applies to NERC for a
permit, which is then granted upon fulfilment of all requirements
of NERC. For me, the interface of the public sector and organized
private sector at the back-end of the NESI value chain, meeting at
the intersection of providing value and solving a problem which has
for a long time affected all players along the chain, is a welcome
development, and one that must be extolled. The prerequisite of
ten-year business plan, a meter deployment plan and validated
technical expertise, also work to endeavor that the mistake made
with the privatisation drive, where licenses were awarded without
due regard to expertise, technical knowhow or due diligence does
not repeat itself.
It is equally impressive the high level of transparency
encouraged by the Regulations. The necessity for a newspaper
publication of the monthly metering service charge and detailed
roll out plan evince a system that intends to provide close
monitoring not just from NERC, but from everyday consumers.
Additionally, the alienation of companies for the bid rounds who
have in them any participatory interests from Distribution
Licensees aids the process to be as open as possible, and allows
for licenses to be granted without fear or fervor, if this is
followed to the letter. The clear distinction too, of the metering
service charge from the energy charge and the ring-fencing of the
payment of the metering service charge to a dedicated account from
which payouts will be made to the MAPs is a step in the right
direction. The local content provision is creditable too, as it
will help for growing our local industry.
The requirements for MAPs to acquire insurance and the mandated
securitization framework for Distribution Licensees are very
laudable steps that will ensure the financial sustainability of the
metering drive. It is a value-add too, that under the Regulations,
the rights and obligations of all players in the metering activity
are outlined, with the end-user being assured in no mean terms that
he has the right to be metered. Furthermore, the capping of
unmetered customers after a defined period will serve as a
motivation to accelerate the rolling out of meters.
I am worried though, about certain provisions. First, while I
have no bone of contention regarding the length of time as per the
120-day deadline given to the Distribution Licensees for
procurement, my worry is that the ‘Nigerian Deadline’ factor that
has affected every other thing from BVN to National Identity Card
Registration, possibly to the VAID scheme, will arise here again,
and defeat the essence of the provisions under the MAP Regulations.
Perennial excuses like technical glitches, counterparty failure and
late funding are likely to arise at the point where the deadline
looms and the law is to be enforced. The requirement for
several permits where a Meter Asset Provider intends to provide its
services to a string of Distribution Licensees is worrying too. To
my mind, it would be an overly herculean process, and except the
turnaround time for the process is fluid -which is an unduly high
expectation considering the bureaucracy surrounding government
exercises- then investors will also be discouraged by the
repetition of the same process. It would have been preferred if all
that was required was perhaps a No Objection authorization for the
Meter Asset Provider to deal with another Distribution Licensee, or
like upstamping, in property law parlance, the Meter Asset Provider
could only have to obtain an ‘upstamping’ on their permit in order
to deal with a different Distribution Licensee.
With all said, the Regulations have come a perfect time; a time
when electricity consumers have started to ask questions, protest
estimated billing and demand accountability from these privatized
distribution companies. It is hoped that the Regulations will birth
a more efficient distribution regime, attract investors, and aid
the troubling illiquidity in the industry. It is likewise the hope
of the public that the Regulations will live up to its firm and
no-nonsense mandates for all the relevant actors and will
continually demand the highest levels of performance, transparency
and optimal delivery from the MAPs and Distribution Licensees.
Caleb Adebayo is a lawyer with Wole
Olanipekun and Co., where he straddles the busy dispute resolution
team and the nascent commercial team. He is keen on the
intersection of Energy, Finance and Environmental Law. He can be
reached at calebadebayoc@gmail.com