CHAPTER ONE

INTRODUCTION

1.1 BACKGROUND OF STUDY

Automatic meter reading (AMR) was first tested in the early 1960s, when trials were run by AT&T in cooperation with a group of utilities and Westinghouse, but the programme was judged economically unfeasible. The modern era of AMR began in 1985, when several major full-scale projects were implemented, and since then a variety of techniques have been used to improve reliability and performance (Tamarkin, 1992). AMR is now understood as the technology of remotely collecting consumption, diagnostic and status data from utility meters and transmitting it to a central system for billing, monitoring and analysis (IEEE Technology Navigator, n.d.). In developed countries, many successful AMR systems are in use to serve consumers of electricity, water and gas.

In Nigeria, by contrast, large parts of the electricity distribution network still depend on manual meter reading and estimated billing. The Nigerian Electricity Regulatory Commission (NERC) reported in 2018 that about six in ten customers were unmetered and therefore subject to estimated billing (NERC, 2018), and the national metering rate had risen to only 56.07% by October 2025 (Adigun, 2026). Manual billing is applied to domestic and industrial consumers alike. In basic terms, the bill is produced in three steps. First, meter readers go from house to house to record the meter readings by hand. Second, all the readings are sent to a regional billing office, where a data entry operator keys them into a computer to calculate the bills. Third, the bills, printed on paper, are delivered from house to house to the electricity consumers.

This process is manual and prone to errors, and consumers suffer both mentally and financially under such a billing system. Nigerian electricity consumers often face inaccurate, irrational and delayed monthly bills because of weaknesses in the meter reading process and human error (Adegboye et al., 2013). To replace these manual and traditional billing techniques, this study designs and implements a cost-effective yet reliable billing automation system for electricity distribution companies. Because analogue and other conventional meters are already widely installed in Nigeria, the system is designed to work with existing metering infrastructure. Approaches that are compatible with existing meters have the advantage of reducing the cost of automation, since the current metering facilities are not made completely obsolete (Ezeodili et al., 2018). In this way, electricity companies do not have to replace their existing facilities entirely, and they can move from their current billing methods to the automated system.

1.2 STATEMENT OF THE PROBLEM

The Nigerian power sector faces a serious problem of low revenue collection for the electric energy actually supplied, caused by energy theft and network losses. In the second quarter of 2026, for example, the distribution companies billed only 79% of the energy they received, and their average aggregate technical, commercial and collection (ATC&C) losses stood at 36%, against an allowed target of 16.92% (Eche, 2026). One of the prime reasons is the traditional billing system, which is inaccurate, slow, costly and lacking in flexibility and reliability. Estimated billing, which was introduced to cover customers without meters or with faulty or inaccessible meters, has itself been criticised for over-billing consumers (Ohajianya, 2021). The present practice of electricity billing is entirely manual, which makes billing a time-consuming process that requires more manpower. The collection of payments is a late procedure, so many consumers may not pay on time, and the disconnection of unpaid connections is also manual. Because of all these drawbacks, proper auditing is not possible. To overcome these drawbacks, this project was undertaken. If the system becomes part of day-to-day life, it will be useful to both the government and the public.

1.3 AIM AND OBJECTIVES OF THE STUDY

The aim of this research project is to design and develop a software package for the billing systems of the electricity industry.

The objectives of the study include the following:

1. To elaborate the concept of an automated electricity billing system.
2. To design and implement software that depicts a billing system.
3. To examine the modules of the billing system.
4. To point out the impact of the billing system on revenue collection.

1.4 SIGNIFICANCE OF THE STUDY

This research would be of little value if it had no significance to society. The following significance can be derived from it:

1. It will make other related organisations see the need for designing and implementing a billing system.
2. It will assist in showing a proper, reliable and effective medium for managing electricity bills.
3. Finally, the research work will serve as a good reference material for other students interested in researching the topic further in the future.

1.5 SCOPE OF THE STUDY

The research work focuses on the Electricity Billing System (EBS), with the electricity industry serving as a case study. Its scope covers only the important modules of the EBS, namely data collection, analysis, storage and retrieval of information. It does not extend to other areas such as electricity malfunction.

1.6 ORGANIZATION OF THE RESEARCH

The research work is arranged in the following chapters:

Chapter 1: The introductory chapter, which focuses on the preliminary theory.

Chapter 2: The overview of the research work.

Chapter 3: The system design and methodology.

Chapter 4: The system implementation and documentation.

Chapter 5: The summary of the research work.

1.7 DEFINITION OF TERMS

To remove ambiguity and enhance understanding, some key words are defined here:

Billing: The process of sending someone a document asking them to pay for goods or services that they have received or used.

System: A collection of elements or components organised for a common purpose.

Module: A separate unit of software.

Software package: The software itself together with the files that are used only during installation. In a Windows environment it is sometimes called an installation package or update package. It may also refer to multiple software programs that work together or perform similar functions and are bundled and sold together.

References

Adegboye, A., Ayeni, G. A., Alawode, J. A., & Azeta, I. V. (2013). Design and implementation of an enhanced power billing system for electricity consumers in Nigeria. African Journal of Computing & ICT, 6(1), 49–58.

Adigun, O. (2026, January 12). DisCos record N44 billion revenue loss in October 2025 – NERC. Nairametrics. https://nairametrics.com/2026/01/12/discos-record-n44-billion-revenue-loss-in-october-2025-nerc/

Eche, C. (2026). Electricity Commission reports ₦603.64bn revenue, flags high losses. Voice of Nigeria. https://von.gov.ng/electricity-commission-reports-%e2%82%a6603-64bn-revenue-flags-high-losses/

Ezeodili, E. U., Adebo, K. A., & Akinbulire, T. O. (2018). Design and construction of a smart electric metering system for smart grid applications: Nigeria as a case study. International Journal of Scientific and Engineering Research, 9(7), 798–805.

IEEE Technology Navigator. (n.d.). Automatic meter reading. IEEE. https://technav.ieee.org/topic/automatic-meter-reading/

Nigerian Electricity Regulatory Commission. (2018). Consultation paper on the capping of estimated billing for unmetered electricity customers. NERC. https://nerc.gov.ng

Ohajianya, A. C. (2021). Estimated billing system is the bane of grid electric power supply and development in Nigeria: An empirical analysis. Journal of Advances in Science and Engineering, 5, 1–10.

Tamarkin, T. D. (1992). Automatic meter reading. Public Power, 50(5).