“NERC Directs Electricity Distribution Companies (DISCOs) to Refund Prepaid Meter Costs to Customers in the Form of Energy Credits Spanning Three Years, in Compliance with National Mass Metering Regulations 2021
In a significant Development, the Nigerian Electricity Regulatory Commission (NERC) has Issued a directive compelling Customers to seek Reimbursement for Prepaid Meters purchased under the Meter Asset Provider (MAP) Scheme.
This Directive, referred to as ‘Order on the Reimbursement Meter Cost,’ Specifies that Customers are Entitled to Energy Credits as a form of Refund over three years.
The Order, officially Designated as Order No: NERC/2023/001, was Signed by NERC’s Chairman, Sanusi Garba, and the Commissioner for Legal, Licensing & Compliance, Dafe Akpeneye.
It comes at a time when the Prices of Single-phase and Three-phase Meters have recently undergone an upward revision, Increasing from N58,661.6 to N81,975.16 and from N109,684.36 to N143,836.10, respectively.
The Directive is by Section 8(f) of the Meter Asset Provider and National Mass Metering Regulations, 2021, which Stipulates that Distribution Licensees must Reimburse Customers who have paid for Meters under the MAP Framework through Energy Credits.
The Cost of the Meter is to be Amortized over a Maximum period of 36 months.
Additionally, Section 24(1)(b) of the Regulations Mandates that when a Customer chooses to make an upfront payment for Meters under these regulations, the distribution Licensee must Refund the Cost of the Meter through Energy Credits.
This Provision also applies to upfront Payments made by Customers when the MAP Framework Commenced in 2018.
NERC conducted a Financial evaluation of the Distribution Licensees (DISCOs), leading to a revision of the previous 36-month Reimbursement Period.
The Order aims to ensure fairness, transparency, and accountability in the Metering process under the MAP Framework.
It establishes a fair Mechanism for the Reimbursement of Meter Costs to Customers within the Scheme.
Furthermore, the Order aligns the Amortization period for Reimbursement with the Average useful life of Electronic Meters, which is approximately 10 years.
It also aligns the Amortization period of the Cost of MAP Meters with the repayment of other Financing sources for Metering and recognizes Meters Installed under the MAP Framework in the Regulatory Asset Base (RAB) of DISCOs.
Under this Directive, the Cost of Prepaid Meters paid by Customers under MAP will be amortized over 120 equal Installments and Refunded through energy Credits calculated based on the prevailing Tariff at the time of vending.
In cases where a Customer does not make a vending Transaction in a given month or months, the DISCOs are obligated to Refund the accumulated Energy Credits due to the Customer upon the next vending Transaction.
For Postpaid Customers who purchased Meters under the MAP Framework, the Reimbursement by the DISCO will take the form of a Rebate on Customers’ Bills.
NERC has Instructed DISCOs to submit Monthly reports containing a Breakdown of the Total Monetary Value of Refunds to Customers through Energy Credits, following the Commission’s prescribed template.
Moreover, the Order emphasizes that the Entirety of the Metering Infrastructure Installed under the MAP Framework shall be Included in the Regulatory Asset Base (RAB) of the DISCOs during the next major or Extraordinary tariff review, cementing its Regulatory Impact and Importance in the Energy Sector.”
