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As the process towards handing over the Federal Government of Nigeria’s Generation and Distribution Companies to the preferred bidders’ moves on, the NERC is fine-tuning its Rules and Regulations to ensure adequate overseeing of the privatized sector. The NERC recently published on its website the Final Draft of the Metering Code for comments by stakeholders. The Metering Code provides for the rules governing connection by the Generating Companies (Gencos) to the Transmission Company of Nigeria (TCN) or to Distribution Companies (Discos), TCN to Discos and Discos to Discos or Consumers. These connections facilitate the injection and ejection of electricity from one supplier to another or to consumers.

Electricity Supply agreements usually seek to cover some of the provisions of the Metering Code, thus it is important for the new owners of the electricity supply companies to understand to what extent they can contract out of the provisions of the Metering Code. We will mention a few of the Metering Code’s provisions that may be of corcern.

Another provision is on calibration and certification of the meter. The Metering Code provides that the owners of the meters must ensure that the NERC issues a certificate for the meter or that the Meter is bought already certified and such manufacturer’s certificate is approved by the NERC for a period of Fifteen (15) years. Parties to electricity supply agreements sometimes seek to agree that calibration of the meter is not a condition to their agreement. Will the NERC permit this? Since the new owners of Gencos and Discos are taking over existing assets, the Metering Code provides for the NERC, in its discretion, to determine such meters as certified if the NERC deems that the meters have undergone calibration and verification tests that are compatible with the Metering Code standards as at the Effective Date of the Metering Code. To obtain this certification, the Disco shall provide the relevant documents to the NERC within 12 months of this Code. Where the NERC does not grant the certification, the Disco shall obtain certification as provided in the Metering Code.

Under the Distribution Metering Code (DMC) section of the Metering Code, the Disco is to carry out periodic tests to ensure compliance with standards and the NERC can carry out random tests as well. The User of the meter can also request for such tests to be carried out at its costs.

Discos are to rectify faulty metering systems promptly and the users are to use the meters reasonable and report any fault noticed. To what extent can the Discos exempt liability for loss suffered by the Users from the metering system as a result of a fault from the User’s electrical installations (appliances)?

The Discos are to maintain a register for the meters for settlement of electricity usage and supply. The DMC permits the Discos to estimate electricity usage where the data is unavailable, inaccurate or otherwise unsuitable for settlement purpose. To what extent can this power to estimate be encroached in power supply agreements? Or should the Discos really be given such arbitrary powers to estimate electricity usage? Will this not dis-incentivize them from meeting their obligation for the meters to provide accurate readings?

As the NERC deals with our issues with the Metering Code and prepares for overseeing an electricity supply market with more participators, we also look forward to the anticipated improvements in the sector.

Tonbofa Ashimi

Edward Ekiyor and Co. is a Nigerian law firm that has developed expertise in the Energy and Natural Resources Sectors, Finance, Corporate and Commercial matters and in resolving disputes.

 

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