PREPAYMENT METERING SCHEME: THE NIGERIAN EXPERIENCE.

NAFISATU ALI

ABSTRACT

The prepayment metering system or prepayment budget meter is a metering system whereby customers are able to regulate and monitor their electricity consumption directly. It was introduced into the Nigerian metering system about six years ago, by a South African company.

A district called Island district in Lagos was used as a case study and a high success was recorded because the contractor installed and trained some staff of the power industry on the prepayment meters.

Other places where these prepaid meters have been installed in Nigeria are some districts in KanoState and the FederalCapitalTerritory, Abuja. However, not much success was recorded in these areas due to the fact that after installation the contractor abandoned the site and no staff received training on the prepayment meters.

The Federal Government of Nigeria has approved the purchase and installation of some prepayment meters for more districts of Abuja and Lagos.

Prior to the installation of these prepayment meters the conventional (credit) type of meters were in use in these districts and are still being used in other parts of Nigeria.

The REMUC, which means Regulate and Monitor Your Consumption, is an acronym for the prepayment Budget meter.

This unique metering system was introduced to replace age-long manual and somewhat torture practice of meter reading, printing and distribution of bills.

Presently the Nigerian power utility, National Electric Power Authority-(NEPA) has enormous problems: one of such problems is the refusal of customers to pay for social services rendered to them.

With REMUC there will be no need for meter reading, no more estimates, not more disconnection, no more reconnection fees and no more customers refusal to pay bills.

For the electricity industry (NEPA) to carry out its capital intensive projects such as daily expenditure profile, sustain and improve current efforts at rehabilitating ailing power stations, construction and rehabilitation of transmission and distribution networks, a lot of funds are required.

Various marketing strategies to encourage customers to pay their bills promptly embarked upon in the past have been largely unprofessional given their offensive and coercive antecedents.

For instance, of what value is mass disconnection of customers if the customer database is either faulty or non-existent, or meters not read promptly or correctly. A situation where about 40% of customers are not metered. The scorecard indicates that less than 15% of customers in the network pay their bills regularly while over 30% are illegally connected to the network. The credit type of metering poses a lot of problems which deprives Authority revenue for recurrent and capital expenditure.

Expectedly the poor customer services have elicited poor public perception of the Authority towards bill payment and protection of its installations from being vandalized.

This paper therefore discusses the historical background, operational overview, merits and demerits amongst others, of the prepayment metering scheme in Nigeria.

HISTORICAL BACKGROUND.

The installation of prepayment meters commenced in Nigeria in July 1997. A part of Island district called Victoria Island was used as a case study for the installation and monitoring of the success of the prepayment meters. Prior to the commencement of the project, four staff of the power utility were in South Africa for familiarization and training. The team also visited Tanzania to witness installation and management of the prepayment meters.

The project took off with a System Master Station computer (SMS), three (3no.) Credit Dispensing Units (CDU) or Validators, One thousand five hundred (1,500) Single Phase prepayment meters, One thousand (1,000) Three phase meters (were later added in July, 1998), some materials such as token cards, inkjet cartridges, ribbons, printer rolls, etc.

OPERATIONAL OVERVIEW

The operational cycle began with the identification of premises to be installed with the prepayment meters. This was followed with creating customers’ awareness through the distribution of printed handbills and posters to customers in the identified sites.

Meters were then taken to sites for installation, old meters (if any), were recovered back to the stores for recalibration and redeployment to other areas. On site, training were afterwards conducted for the customers.

After installation, necessary documentation were made and the customer’s data were sent to the System Master Station (SMS) operator for capturing. The latter will also send the captured data to the CDUs through disk-transfers. Each CDU can only transact with operators and customers registered in its database.

STAFFING

The staffing of the prepayment metering project in Island district is as stated below:

ACCOUNTS

Cashiers, otherwise known as CDU Operators who essentially collect money from customers and issue tokens to them.

SMS Operators - An SMS Operator processes data from the installation team, generates reports, attends to customers’ enquiries and supervises the cashiers. He does not sell tokens.

Supervisor (District Accountant). The supervisor is able to perform duties of both the CDU Operators and the SMS operators, as well as configure new operations.

MARKETING

The marketing section consists of:

  • Project Manager – Supervises the installation of the prepayment meters and attends to customers enquiries and problems.
  • District Co-ordinator – Is in charge of the co-ordination of the entire scheme.
  • Installation team – comprises of the chief installer and five other installers. They survey and prepare sites install prepayment meters, submit data to SMS operator for processing after installation services.
  • Monitoring team – carries unscheduled visits to customers meter points and uses exception reports to monitor cases of by-passing and other irregularities.
  • National Co-ordinator – He is the overall supervisor of the project and is also the liaison officer between the benefiting district and the contractor.
SERVICING

Routine maintenance is carried out by the SMS operators on both the SMS and CDUs. Serious maintenance and repairs are carried out on the system by a local Computer Engineering company. He has successfully solved system problems overtime.

CUSTOMER REACTIONS

Customer reactions have been very positive and they are full of praises for the system once they get used to the prepayment meters.

MERITS

The prepayment metering system has a lot of advantages, some of which are: -

1.Prepayment before consumption, hence no credit / debit.

2.Customers now regulate and monitor their consumption to reduce wastage (energy conservation culture).

3.Customers privacy / confidence is enhanced.

4.They have fewer complaints in their relationship with NEPA.

5.Huge outstanding debts were recovered through mandatory programmed installations.

6.Difficult and high mobility customers (police, security agents and Government organizations and establishments) will now pay before consumption.

7.No production and distribution of bills.

8.No reading of meters with the attendant errors.

9. No more disconnection / reconnection.

10.Ready reports / returns from the SMS.

DEMERITS

The main disadvantage of the system is that fraudulent customers do tamper with and

bypass the meters. Some customers do connect directly when the REMUC cards are exhausted.

These can be reduced by having an effective/efficient monitoring team.

THE FUTURE

There is hope of a bright future for the system. However, more vehicles will be needed for an

effective and efficient monitoring, also more meters are required to replace burnt and faulty

meters.

Use of coaxial cables is preference to the normal PVC wires will effectively deal with

illegal practice of by-passing.

Training of staff and opening of more vending points as customer population increases need

also to be given priority.

RECOMMENDATIONS

Based on observations, findings and popular demands, the following recommendations

are hereby made.

Expansion of the project: That the project be expanded by importation of more meters

to meet the growing population and increasing demand.

Newly constructed structures are recommended for prepayment metering.

Establishment of more selling points: Moreselling points should be established at locations

close to existing and new project sites.

Back-up System Master Station (SMS): Additional SMS will be needed as a

back-up to allow for maintenance / repairs of the existing one at any location.

Regular Servicing of the Validators and SMS: A regular servicing of the prepayment

computers need to be maintained to forestall breakdowns. The formalization of maintenance

agreement with a local consultant to solve problems on the computers whenever they arise is

highly recommended.

Provision of vehicles: More vehicles should be allocated to the project to sustain steady

installation and ensure effective monitoring.

Cash counting machines: Cash counting machines should be provided to ensure speedy

and accurate transactions since all purchases are made in cash.

Training: Local and international courses / seminars be organised for staff involved

in prepayment metering project in order to improve their computer literacy.

Stock of Installation Materials: Adequate stock of installation materials be made

available to the district. 5% buffer stock required for immediate replacement of faulty one

to prevent losses.

Legislative: There should be a law to discourage customers from bypassing or illegal tampering with these meters. Mere imposition of penalties cannot deter them, apart from the stringent laws; the other step that could be taken to stop by passing of these meters is constant monitoring.

The prepayment metering should be made a functional unit to be headed by a Manager on expansion. This will have sections like installation team, monitoring and investigation teams under it.

CONCLUSIONS

The prepayment metering scheme project has succeeded in Victoria Island, a section of Island district of Lagos.

Sixty-seven (67%) of the outstanding debt of the converted customers from credit metering to prepayment metering were recovered.

A good public image (eradicated complaints associated with billings and collections) has been built.

With prepayment metering there is no need for mass disconnection exercise and its associated hazards thereby rechanelling the efforts of staff to other useful functions.

Customers have also been made to imbibe energy conservation culture in areas affected thereby reducing cases of overloading of transformers and probably single phasing / unbalanced loading.

Many customers on credit metering had and are still requesting for conversion from credit to prepayment metering. Similarly, prospective customers always show preference for prepayment metering but mostly forced on credit metering.

Finally, the prepayment metering is more accurate than the existing electromechanical credit meters thereby generating more revenue for the power utility.

I believe that the project will also succeed in other well-organized locations in Nigeria. However, the belief of some staff interviewed in island district is that there would be human problems such as bypassing and tampering with the prepayment meters if installed in suburbs like Ajegunle or Mushin, due to the attitude of residents in these areas.

Also, the installation of the prepayment meters might not be worth it in rural areas where the consumption of electricity is not much and revenue generated is low.

Biography

Speaker: Nafisatu Ali

Position: Manager Protection, Control & Metering in transmission

Company: National Electric Power Authority (NEPA)

Country: Nigeria

Nafisatu Ali is a Manager Protection, Control & Metering in the transmission sector of the Nigerian power utility – National Electric Power Authority (NEPA).

She holds a Bachelor of Engineering (Elect.) degree and has worked with NEPA for eight years.

She is a corporate member of the Nigerian Society of Engineers (NSE) and also member of the Association of Professional Women Engineers of Nigeria (APWEN).

Company Background Information

Company: National Electric Power Authority

Country: Nigeria

The National Electric Power Authority (NEPA) is the Nigerian power utility charged with the responsibility of generating, transmitting and distributing electric power to all parts of the Nation.

Established in 1972 as a result of the amalgamation of Niger Dams Authority (NDA) and Electricity Corporation of Nigeria (ECN), NEPA has eight generating stations with a total installed capacity of about 6,000MW and several transmission and distribution stations all over the country.