Oil & Energy

Towards Efficient Metering Of Customers’ Houses

Published

13 years ago

July 9, 2012

The recent directive by the Nigeria Electricity Regulatory Commission (NERC) that distribution companies (DISCOs), under the Power Holding Company of Nigeria (PHCN) should ensure the metering of all customers’ houses across the country within 18 months could simply be seen as a blue-Peter or blanket-bath for the unbundled power company.

It has since been noticed by Nigerians that even when houses are metered, NEPA/PHCN staff do not read meters before billing, rather they deliberately estimate and issue ‘crazy bills’ and charging consumers for power they did not consume. Even the distribution companies claim that average consumption of those who were adequately metered was applied to a cluster of residence to arrive at estimated consumption and customers believe that the DISCOs calculations for estimated billing were not based on established scientific or reliable parameters.

Eyo Ekpo, the Commissioner for Marketing, Competition and Rates of the NERC had ordered all the DISCOs to submit their metering plans for an effective billing system, adding that the distribution companies were expected to complete the metering process between 12 and 18 months.

“We have told them that between 12 and 18 months, they should be able to meter all houses of their customers” , Ekpo said.

According to him, NERC is determined to ensure greater number of meter distribution to customers.

The main issue bothering customers and Nigerians as a whole is not the metering of their houses but the question is, are PHCN staff prepared to read the meters and give consumers accurate bills?

Metering of electricity in Nigeria, according to a report submitted by the Metering Inquiry Committee, began with the production and consumption of electricity around 1895. The system and process are, however, bedeviled by inefficiencies and corrupt practices.

Historically, electricity metering was centrally coordinated with the various units of NEPA/PHCN at the distribution end relying on the procurement apparatus at the headquarters to procure and distribute meters to customers through three central stores. This inefficient system led to a backlog of meter requests by customers who pay for such services without the meters being installed.

The resultant effect has been the institutionalization of the unwholesome practice of estimated billing and the attendant customer dissatisfaction and disappointment, which partly accounts for consumers’ refusal to register for meters.

It is against this backdrop that the Metering Inquiry Committee was set up to garner data and information on the root cause of the endemic metering crisis in the country which impacts the electricity sector negatively. During its assignment a few weeks ago, the committee discovered that less than 50 per cent of the registered customers in the Nigerian Electricity sector are metered.

This has led to the prevalent practice of arbitrary charges based on unscientific estimation of electricity consumed by customers by the DISCOs in order to meet up with their overhead costs in an environment of inefficiency and dwindling supply of electricity.

According to the committee’s report, the total number of customers captured in the records of operators of the Nigerian Electricity Supply Industry is 5,172,979, which represents 18.65 per cent of Nigeria’s total households put at 28,900,492 as provided by records from the National Bureau of Statistics in 2006. This record, however, does not include those enjoying electricity illegally who are not registered by the DISCOs, known as illegal consumers’.

Out of the number of customers registered, 2,893,701 or 55.94 per cent were metered, while 2,355,045 or 45.53 per cent were unmetered. The Committee, however, discovered that out of the total number of customers metered, about 701,385 or 22 per cent of the meters were faulty. At present, a total of 2,956,069 or 54.83 per cent of all the customers registered are not metered at all or have no functional meters. On the average, therefore, only about 2,434,541 or a minute 8.42 per cent of the total households in Nigeria are currently being billed correctly by all DISCOs if a household is used as our metering index.

The remaining registered customers are, therefore, at the mercy of estimated billing. This development has created a wide gap in effective billing which calls for emergency response.

In Port Harcourt, the Rivers State capital, the Business Manager, Diobu Business Unit of the PHCN, Festus Mmegbu disclosed that as at march this year, 85 per cent of the 36,000 customers using electricity in the area do not have meters. He said there was massive deployment and installation of meters going on and called on customers to register and pay for meters.

He regretted that failure by customers to install meters at their premises was causing under-estimation.

Most customers are clamouring for pre-paid meters as a more efficient metering system that can guarantee accurate billing. This is why the Chief Executive of Ikeja Electricity Distribution Company Plc expressed concern over agitations of customers for prepaid meters which are being used in the area currently.

There is need to develop and adopt a metering system aimed at making smooth and effective our electricity operations. To ensure customer satisfaction, special units should be established by the distribution companies such as tracking/management of customer account records and debts to ensure that no unwarranted debts or excessive estimations are made and also ensure that where frivolous estimates were made in the past, they will be expunged to give credibility to the bills and billing operations.

Electricity distribution companies should ensure fairness in dealing with their customers to maintain the trust and confidence reposed in them. There should be an elaborate customer reclassification exercise aimed at ensuring that no customer is placed on the wrong tariff class. To enjoy the cooperation of customers, distribution companies must make sure that their Chief Executive Officers (CEOs) are responsible, efficient and accountable.

They should avoid the situation where monies for meters are paid through draft by customers to the CEOs and there is no feedback as to whether they get the meter or not, and how long the customer stays before getting meter. It is discovered that in most of distribution companies, customers paid for meters for years and yet were not supplied any. In most cases, meters are not scarce but the company staff demand for kick-back before releasing the meter.

There are also evidences of some DISCOs refusing customers’ payments for meters, especially pre-payment meters. Indeed, sharp practices and inefficiencies are the hallmarks of the metering system in Nigeria, from ageing power plants and terrible transmission lines to more importantly, rampant corruption and poor collection rates.

In all the six geo-political zones visited by the Metering Inquiry Committee, complaints ranging from refusal to meter customers, estimated billing following refusal to read installed Non-PPM meters, culture of impunity of PHCN staff, connivance of some unscrupulous PHCN staff with private individuals to defraud the public were received.

Other irregularities discovered were demand for money for preferential treatment in various forms such as hot lines, tamper code, PR (unreceipted additional payment for supply of meters. Estimated billing was the norm in all the DISCOs visited by the committee. For instance, customers in Lagos, Enugu, Yola, Kaduna, Makurdi and Abuja distribution companies alleged that delay in the supply of meters to customers and blantant refusal to obtain correct meter readings which resulted in estimated billing were deliberate. They were of the view that with the poor supply of electricity in the country and gross inefficiency on the part of distribution companies to curtail operational losses (human and technical) estimate billing remains the only option for the DISCOs.

For Nigeria to get it right in the metering policy, the Federal Government through the Nigerian Electricity Regulatory Commission (NERC) should review the operations of the distribution companies, especially now that the power sector reform is on the front burner of the present administration coupled with the privatization process of the Power Holding Company of Nigeria (PHCN).

NERC should adopt a regulatory system that would make it obligatory for DISCOs to meter their distribution transformers for adequate energy accounting and equity as well as intensify its monitoring and enforcement machinery to ensure proper implementation of existing regulations on metering, billing and cash collection. There shall be overall improvement in customer service and operations to eliminate the culture of impunity prevailing in the electricity sector.

Shedie Okpara

Oil & Energy

Hedge Funds Turn Bearish On Oil, Bullish On Natural Gas

Published

1 month ago

March 17, 2025

The Tide

Traders have not been this bearish on oil in months or so bullish on United States natural gas in years.
The latest data on money managers’ positioning in the WTI and Brent crude and U.S. natural gas futures showed two contrasting trends—speculators are betting that oil prices would remain low or go even lower while increasing the bets that natural gas prices would continue marching higher.
So far this year, geopolitical and supply and demand factors have been increasingly bearish for the oil price outlook and increasingly bullish for natural gas prices.
In the oil market, hedge funds and other portfolio managers have been slashing their bullish bets since the end of January, when the U.S. sanctions on Russia’s oil trade were the primary bullish driver of managed money to bet on a tightening market.
With U.S. President, Donald Trump, now in office, the sentiment has quickly soured amid the president’s insistence on lower oil prices, his efforts to broker an end to the war in Ukraine, and – most of all – the enormous uncertainty about on-and-off tariffs and tariff threats and their potential impact on the American economy.
As a result, market participants are preparing for lower oil prices, even amid expectations of declining oil supply from Iran and Venezuela due to President Trump’s hawkish policy toward these OPEC producers.
Speaking of OPEC, the wider OPEC+ group has just said it would begin increasing supply as of April, adding further downward pressure on prices.
Faced with all these bearish drivers, money managers have been reducing their bullish bets on crude oil futures, with the U.S. WTI Crude hitting the lowest net long position – the difference between bullish and bearish bets – in 15 years at the end of February.
In the week to March 4, the latest reporting week with data released on March 7, speculators bought WTI amid a major selloff in all other commodities except for U.S. natural gas.
The net long in WTI rebounded from the 15-year low, but it wasn’t because the market suddenly started betting on higher prices going forward. The rise in WTI buying and the net long was the result of short covering in the U.S. crude futures contract.
In Brent, hedge funds cut their bullish-only bets in the week to March 4 for the biggest decline in longs since July 2024.
Unlike in crude oil, money managers have become increasingly bullish on U.S. natural gas after inventories dipped this winter to below the five-year average as demand surged in the coldest winter for six years.
The net long in natural gas further swelled in the week to March 4, as the number of new bullish bets was four times higher than the new short positions.
“Natural gas continues to benefit from rising demand, both domestically in the US and towards exports via LNG,” Ole Hansen, Head of Commodity Strategy at Saxo Bank, said, commenting on the latest Commitment of Traders report.
At the start of the winter heating season in November, U.S. natural gas inventories were higher than average for the time of the year as America entered the season with stocks at their highest level since 2016.
These stocks, however, were quickly depleted during the coldest winter for six years, with demand for space heating and power generation soaring. A month before the end of the winter heating season, U.S. natural gas inventories have now slumped to below the five-year average and well below the levels from the same time in 2024, at the end of a mild winter.
The lower inventories and the higher demand – both for domestic consumption and LNG exports – have pushed prices higher, encouraging producers to boost gas output this year. Traders bet that prices will go even higher as demand from LNG plants is set to accelerate with the ramp-up of new U.S. export plants.
Paraskova writes for Oilprice.com.

By: Tsvetana Paraskova

Oil & Energy

Renaissance Finalises Acquisition Of SPDC

Published

1 month ago

March 17, 2025

The Tide

Renaissance Africa Energy Holdings says it has successfully completed the acquisition of 100 percent equity holding in the Shell Petroleum Development Company of Nigeria (SPDC).
Spokesperson of the company, Tony Okonedo, who disclosed this in a Press Release, Last Thursday, said Renaissance has completed all processes for the full transfer of ownership of SPDC to the consortium, adding that it will now operate as Renaissance Africa Energy Company Limited.
“Renaissance Africa Energy Holdings today announced that it has successfully completed the landmark transaction between itself and Shell for the acquisition of the entire (100%) equity holding in the Shell Petroleum Development Company of Nigeria (SPDC).
“This follows the signing of a sale and purchase agreement with Shell in January 2024 and obtaining all regulatory approvals required for the transaction. Going forward, SPDC will be renamed as ‘Renaissance Africa Energy Company Limited.
“Going forward, SPDC will be renamed as ‘Renaissance Africa Energy Company Limited’.
“Renaissance Africa Energy Holdings is a consortium consisting of four successful Nigerian independent oil and gas companies: ND Western Limited, Aradel Holdings Plc. FIRST Exploration and Petroleum Development Company Limited and the Waltersmith Group, each with considerable operations experience in the Niger Delta, and Petrolin, an international energy company with global trading experience and a pan African outlook”, the statement reads.
Speaking on the acquisition, the Managing Director/CEO, Renaissance Africa Energy Holding,Tony Attah, said Renaissance Africa Energy Company Limited has a vision to be the leading oil and gas producer in Africa and to help the continent achieve energy security.
Attah expressed gratitude to the Federal Government for its support and pledged the company’s commitment to the Petroleum Industry Act.
“We are extremely proud to have completed this strategic acquisition. The Renaissance vision is to be ‘Africa’s leading oil and gas company, enabling energy security and industrialization in a sustainable manner’.
“We and our shareholder companies are therefore pleased that the Federal Government has given the green light for this milestone acquisition in line with the provisions of the Petroleum Industry Act”, he said.
The CEO acknowledged the contributions of Nigeria’s Minister of Petroleum Resources, the Nigeria Upstream Petroleum Regulatory Commission (NUPRC), and the Nigerian National Petroleum Company Limited (NNPCL) in facilitating the deal.
He said, “we extend our appreciation to the Honourable Minister of Petroleum Resources, the CEO of the Nigeria Upstream Petroleum Regulatory Commission (NUPRC), and the CEO of Nigeria National Petroleum Company Limited (NNPCL) for their foresight and belief, paving the way for the rapid development of Nigeria’s vast oil and gas resources as strategic accelerator for the country’s industrial development”.
The Statement further revealed that Renaissance partner companies collectively have an asset base of more than $3 billion and currently safely produce approximately 100,000 barrels of oil per day (bpd) from 12 oil mining leases and operate two functioning modular refineries in Nigeria’s Niger Delta.

Oil & Energy

Oil-Rich Communities Must End Infighting To Access Dev Funds – FG

Published

1 month ago

March 17, 2025

The Tide

The Federal Government has cautioned oil-rich communities against infighting and disruption of oil production, saying it could hinder their access to the Host Community Development Fund.
Minister of State for Petroleum (Oil), Heineken Lokpobiri, made the appeal while speaking at the KEFFESO Stakeholders Forum, in Yenagoa, Bayelsa State.
Lokpobiri noted that the Petroleum Industry Act (PIA) was enacted to bring stability to the oil sector and address longstanding grievances about underdevelopment in host communities.
He lamented, however, that internal disputes among stakeholders have made it difficult for these communities to access and utilize the funds meant for their development.
Lokpobiri insisted that host communities must overcome internal conflicts that hinder their access to the funds.
“This KEFFESO Stakeholders Forum is to see how host communities can maximize the benefits from the Host Communities Trust Funds as prescribed by the PIA.
“If oil production is disrupted, everyone loses — the Federal Government, oil companies, and the host communities themselves. That is why host communities must collaborate with the government and oil companies to ensure smooth operations” Lokpobiri stated.
The Minister called on Host Community Development Trusts (HCDTs) in the Niger Delta to effectively utilize the 3% operational funds allocated to them under the PIA 2021 to drive sustainable development.
He further called that oil-producing communities should take ownership of the oil and gas facilities within their domains and work with relevant stakeholders to ensure sustainable benefits.
“As stakeholders who have their respective stakes in oil and gas operations in the country, we should work together to ensure that we maximize the benefits of oil and gas.”
The minister also emphasized the global push for cleaner energy, warning that the relevance of fossil fuels depends on their extraction and marketability.
“Don’t forget there is a global campaign against the continuation of production of fossil fuel.
“Fossil fuel will never go away. Fossil fuel will not have any value unless you bring it out of the ground or from the sea to the market, that is why we need this collaboration,” he said.
In his remarks, the Executive Secretary, Nigerian Content Development and Monitoring Board (NCDMB), Engr. Omotsola Ogbe, reaffirmed the board’s commitment to leveraging the provisions of the Nigerian Oil and Gas Industry Content Development (NOGICD) Act.
Represented by the Board’s Director of Legal Services, Naboth Onyesoh, Ogbe noted that the NCDMB’s Community Content Guidelines were designed to ensure sustained community engagement as local content is prioritized throughout the oil and gas value chain.
Ogbe praised the KEFFESO Host Community Development Trust for its efforts in ensuring that oil revenues benefit local communities.
Also speaking, the Managing Director and Chief Executive Officer, First E & P, Ademola Adeyemi-Bero, described the KEFFESO Stakeholders Forum as a crucial platform for discussing and strategizing solutions to the challenges facing marginalized communities in the Niger Delta.
He reiterated the company’s commitment to fostering meaningful and sustainable development in the region.
The forum, themed “Envisioning Sustainable Community Development in Niger Delta Host Communities: Identifying Challenges and Actualising The PIA Paradigm Shift,” brought together key stakeholders to discuss strategies for maximising the benefits of the Petroleum Industry Act(PIA).