Implications of metre prices deregulation, by Ade Adesokan


The Nigerian Electricity Regulatory Commission (NERC) has reportedly adjusted the price of a single phase meter from N58,661.69 to N81,975.16.

It also adjusted the price of three phase meter from N109,684.36 to N143,836.10.

The adjustments were contained in the  ORDER NO: NERC/2024/040 that the commission’s Chairman, Engr. Sanusi Garba and Commissioner Legal and Licensing Compliance, Barrister Dafe Akpeneye issued Monday April 29, 2024.

The title of the order is “The  deregulation of meter prices for meters deployed under the Meter Asset Provider Scheme.”

The Chairman and Commissioner stated that the Meter Asset Provider and National Mass Metering Regulations (the “Regulations”) provide for the metering of end-use customers of successor electricity distribution licensees (“DisCos”).

Section 8(1 )(c) of the Regulations provides that “the cost of single phase and three phase meters for MAPs, inclusive of all other associated costs of installation and warranties shall continue to be at the regulated rates approved by the Commission”.

NERC said the Meter Asset Providers (MAPs) and Local Meter Manufacturers Associations (LMMAs) have requested a further review of meter prices in consideration of significant changes in NGN/USD foreign exchange rate and inflation rate since the last price review in September 2023 and the significant changes in these macroeconomic variables has constrained their ability to supply meters at the approved regulated price.

Garba and Akpeneye further added that the Commission has noted the need for the efficient pricing of meters to respond more quickly to changes in macroeconomic parameters, particularly exchange rates. 

According to them: “The Commission has further taken cognisance of the constraints/challenges faced by MAPs and LMMAs and therefore approved the deregulation of prices of meters deployed under the MAP scheme with effect from 1 May 2024.”

 The implications

The deregulation of meter prices under the Meter Asset Provider (MAP) scheme, following the tariff hike by the Nigerian Electricity Regulatory Commission (NERC), has several implications for the electricity sector and consumers:

 Market-Driven Pricing

The prices of meters will now be determined through a competitive bidding process. This could lead to market-driven pricing that reflects the actual costs and efficiencies of meter production and distribution.

 Consumer Choice and Empowerment

Consumers will have the option to select from a variety of authorized meter providers. This choice could empower consumers to make decisions based on price, quality, and service levels.

 Potential for Improved Service Delivery

With increased competition among meter providers, there is a potential for improved service delivery and customer satisfaction

Innovation and Technology Advancement

Deregulation may encourage innovation and the use of advanced technologies in metering solutions, as providers seek to differentiate their products in the market.

 Transparency and Fair Competition

The open bidding process is expected to foster transparency and fair competition among meter providers.

 Challenges in Price Regulation

While deregulation can lead to efficiency, there might be challenges in regulating prices to prevent exploitation, especially in the absence of strong consumer protection frameworks.

Impact on Meter Accessibility

The initial increase in meter prices could affect accessibility for some consumers, particularly those with lower incomes.

 *Quality Assurance:*

NERC will oversee the submission of price offers from MAPs to ensure fair competition and quality assurance.

 *Stock Availability:*

MAPs are required to maintain a minimum stock of meters, which could help prevent shortages and ensure timely installations.

 Consumer Protection

Measures have been put in place to ensure timely installation of meters, with penalties for MAPs that fail to meet deadlines.

Overall, the deregulation of meter prices aims to create a more efficient and consumer-friendly electricity metering system.

However, it will require careful monitoring by NERC to ensure that the benefits of competition are realized and that consumers are protected from potential negative impacts.

 Ade Adesokan is a Public Affairs Commentator

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