DisCos set for showdown with FCCPC, NERC over mandatory meter replacement charges

Electricity distribution companies, DisCos, appear to be headed for a standoff with the Federal Competition and Consumer Protection Commission, FCCPC, and the National Electricity Regulatory Commission, NERC, following their stance on customer charges for replacing functional meters.

Despite directives from both FCCPC and NERC stating that customers should not bear the cost of meter replacements, the DisCos reaffirmed on Sunday, November 10, that affected customers must pay.

The DisCos also announced plans to phase out these functional meters by Thursday, November 14, 2024, warning that customers who do not comply with the payment requirement will face disconnection and be unable to recharge their accounts.

A source from a Lagos-based DisCo confirmed that customers who refuse to pay for meter replacements would lose access to electricity.

Responding to customer complaints, the FCCPC emphasized that DisCos must prioritize consumer rights, in line with existing regulations.

FCCPC Chief Executive Officer Tunji Bello, who acknowledged receiving petitions from customers, assured the public that the commission is committed to safeguarding consumers’ rights.

Similarly, Zubair Babatunde, NERC’s Head of Consumer Engagement, reiterated NERC’s dedication to consumer protection, especially concerning meter replacement issues.

“Obsolete meters must not only be replaced, but must not be removed without immediate replacement. The consumer should not bear the cost of replacing meters,” Babatunde said.

Discos are now requiring customers to pay significant amounts, reaching hundreds of thousands of naira, for replacing existing meters that are being phased out.

For example, Ikeja Electricity Distribution Company, IKEDC, has instructed impacted customers to pay N202,000 for each meter replacement.

According to a source close to the Discos, the deadline set for Thursday is non-negotiable. The source added that it is an international standard to replace any electric meter that has been in service for over 10 years.

This replacement is linked to the Token Identifier, TID, Rollover process, which updates meters for uninterrupted performance. The TID is a 24-bit field used in STS-compliant tokens to track the date and time of token creation.

The source also stated that NERC permits customers to pay for new meters as long as DisCos reimburse them gradually through credit when recharging.

“NERC knows it is the responsibility of DisCos to provide meter. NERC is also aware of the challenges of funding for meters. There is a methodology for meter refund and customers have always been refunded for whatever they pay to acquire a meter by way of giving them energy token over a period of time to cover the cost of acquiring the meter.

“So, in this instance, even those going to buy meter today still fall under the same refund thing, which is usually between three to five years,” the source said.

A source indicated that customers who do not comply with the payment directive may face consequences, as the upgraded STS 2.0 system could make it challenging to ensure electricity supply to outdated meters.

The source also claimed that the DisCos have been incurring losses due to these soon-to-be-phased-out meters, which are reportedly faulty and less efficient.

“They (customers) know why they are protesting the upgrade or replacement. They have been enjoying the system all the while. Once their units are low, the meter doesn’t read efficiently anymore making it a loss for the DisCos.

“They know all these things, but they won’t say it as it is. So, the earlier we get rid of those meters the better for us because of the losses we are incurring from them. This is why we don’t have the luxury of time,” the source said.

A source within one of the DisCos revealed that over 30,000 customers have already applied for meter replacements. The source encouraged affected customers to opt for the available meters now rather than waiting for the intervention meters, assuring them that they would receive refunds over time through energy token credits.