The Nigerian Electricity Regulatory Commission (NERC) has issued the Meter Asset Provider Regulations 2018 (MAP-Regs). The MAP-Regs came into effect on March 8, 2018 and will be enforced by NERC from April 3, 2018. These regulations are designed to provide standard rules to eliminate estimated billing practices in the Nigerian Electricity Supply Industry (usually tagged ‘NESI’) and increase the collection rates of the distribution companies. Ultimately, NERC hopes that the MAP-Regs will enhance revenue assurance in NESI.
Anyone who is keenly interested in Nigeria’s electricity industry or NESI will agree that reduction of the collection losses of the distribution companies (DisCos) is an urgent need. Hence, the MAP-Regs should be exciting news.
However, after studying the MAP-Regs, I had reasons to reflect on whether the new regulations will achieve the desired purpose. This article gives a background of how the collection losses suffered by the DisCos affect the entire industry, highlights measures taken by NERC to remedy this problem till this point, and presents my reflections on the MAP-Regs.
The typical electricity value chain is comprised of generation, transmission, and distribution as shown in the paper available for download. When companies perform all three functions in a country and supply retail electricity to the final consumers, the electricity industry is said to be vertically integrated.
In NESI, the Power Holding Company of Nigeria (PHCN) was established by the Electric Power Sector Reform Act 2005 (EPSRA) and had monopoly over the entire electricity value chain. In 2013, several reforms were introduced which privatized NESI and brought an end to vertical integration.
As part of the privatization process, EPSRA provided for the unbundling of PHCN into separate units for generation, transmission, and distribution. PHCN was unbundled and 18 successor companies were formed comprising 6 generation companies (GenCos), one transmission company, and 11 DisCos.
The Federal Government of Nigeria (FGN) sold and handed over the GenCos to private investors. FGN also sold 60% of its respective interests in the DisCos to strategic investors and handed over control and management of these respective DisCos to the acquiring strategic investors.
You can read the rest of the Paper here
Reason Abajuo Is an LLM Candidate at the Havard Law School