The Nigerian Electricity Regulatory Commission (NERC) has recently released the above-mentioned Order which sets out new requirements for compliance by the MAPs (Meter Asset Providers) and Distribution Companies (DisCos) in line with the Meter Asset Provider (MAP) Regulation 2018. In summary, the Order provides for the following:
1. Meter Price
The new NERC order provides N36,991.50 and N67,055.85 (VAT exclusive) as the exact costs for the purchase of single phase and three-phase meters, respectively. These prices will cover the costs of meter procurement, financing, installation, maintenance and all other meter-associated costs.
2. Repayment Plans
The NERC Order further provides that customers may elect to pay for meters either upfront or on an installment basis. The meters will be installed within 10 days of payment where they make full payment upfront with no further charge imposed.
However, a monthly meter service charge (MSC) will be imposed on their electricity bills where the customer opts to pay on an installment basis. The MSC is distinct from the energy charge owed to the DisCos and will subsist for the duration of the repayment plan. The maximum period for any repayment plan is 120 months. Customers are also permitted to make advance full payments of their outstanding balance without incurring any penalty, regardless of the agreed-upon repayment plan.
3. Financing – Cap on Interest Rates of Meter Asset Providers (MAPs)
The NERC Order directs that MAPs obtain competitive rates for the cost of financing to be passed onto the customers. In this regard, the maximum financing costs the MAPs may pass annually to customers must not exceed 21%. This rate is to commence with effect from 1st August 2019 and may be reviewed by NERC every 3 years.
Although the Order in line with the MAP Regulation protects the customers from exploitation, smart regulation requires that there be no impediment on MAPs recouping their expenses and realizing fair profit in order to foster investment in the sector.