The Nigerian Government announced an increase in the prices of single-phase and three-phase prepaid electricity metres on Wednesday, with the new rates set to take effect from September 6, 2023.
This announcement was made through an official order released by the Nigerian Electricity Regulatory Commission, bearing the number NERC/2023/020. The order was jointly signed by the Commission’s Chairman, Sanusi Garba, and its Commissioner for Legal, Licensing, and Compliance, Dafe Akpeneye.
As per the order, a single-phase metre will now cost ₦81,975.16, up from the previous price of ₦58,661.69, while the price of a three-phase metre has been raised to ₦143,836.10 from ₦109,684.36.
However, this decision faced opposition from power consumers who questioned why the Federal Government continued to increase the cost of various commodities in Nigeria’s energy sector.
In explaining the reason behind the metre price hike, the NERC stated that it aimed to ensure fair and reasonable pricing for both metre Asset Providers (MAPs) and end-user customers. The increase is intended to enable MAPs to recover reasonable expenses associated with metre procurement and maintenance while ensuring a viable return on investment.
The commission emphasised its commitment to evaluating the affordability of metre services for consumers, aiming to prevent excessive pricing that could burden end-users and to ensure that MAPs can provide metres within the prevailing economic conditions.
The closure of the metering gap for end-use customers was also highlighted as fundamental to the financial sustainability of the Nigerian Electricity Supply Industry, as these metres provide revenue assurance for both utility companies and their end-use customers.
The Metre Asset Provider scheme constitutes one of the four frameworks for meter provision to end-use customers in the Nigerian Electricity Supply Industry. As per Section 8(1)(c) of the regulations, the costs of single-phase and three-phase metres issued by MAPs, including installation and warranties, must adhere to the rates approved by the commission.
NERC noted that significant changes in macroeconomic indicators, such as inflation and foreign exchange rates, have necessitated a review of the regulated rates for MAP metres. The commission considered relevant data from the Central Bank of Nigeria and the National Bureau of Statistics as benchmarks for the metre price revision.
Additionally, NERC affirmed that the costs of single-phase and three-phase metres for MAPs, including installation and warranties, will remain at the rates approved by the regulatory authority. These approved metre prices exclude value-added tax but include the revised Nigerian Electricity Management Services Agency sealing cost.
The sealing cost for a single-phase metre is ₦842.80 per unit, while a three-phase meter’s sealing cost is ₦1,100.80 per unit.
The industry regulator stated that all MAPs must adjust their prices to align with the approved rates. Furthermore, they must supply metres that customers have already paid for at the previous rates without additional cost.
To ensure transparency and awareness, all Distribution Companies (Discos) and MAPs are required to develop and implement customer education campaigns regarding price adjustment. They should also provide a schedule for implementing their meter rollout plans and continue to submit monthly sales and meter installation reports to the commission.
Power users expressed their dissent over the metre price increase, urging the government to consider the challenges faced by Nigerian citizens and reconsider this decision. The National Secretary of the Nigeria Electricity Consumer Advocacy Network, Uket Obonga, emphasised that this price hike adds to the growing financial burden on Nigerians, including increases in fuel and diesel prices, making the situation increasingly challenging.