Electricity distribution companies have raised concerns over the Federal Government’s directive that prepaid electricity meters should be provided to consumers at no cost, describing the policy as unrealistic and poorly thought out.
Industry operators, who spoke anonymously due to the sensitivity of the matter, said the directive issued by the Minister of Power, Adebayo Adelabu, failed to adequately consider cost implications and the roles of key stakeholders such as meter manufacturers and installers.
Last Thursday, the Federal Government warned electricity distribution companies and meter installers against charging customers for meters, stating that violators would face prosecution. The minister made the declaration during an inspection of newly imported smart meters at APM Terminals, Apapa, Lagos.
Adelabu explained that the meters were procured under the World Bank–supported Distribution Sector Recovery Programme and must be installed for electricity consumers at no cost, irrespective of their service band. He emphasised that no official or installer was permitted to demand payment from customers.
Describing the directive as unprecedented, the minister stressed that free meter installation would improve billing accuracy and revenue collection across the power sector.
However, DisCo operators told The PUNCH that the meters being described as “free” would ultimately be paid for by the distribution companies over a 10-year period, raising concerns about cost recovery and financial sustainability.
According to them, meter installation involves third-party providers who are not employees of the DisCos, making it unclear who would bear the cost of installation if consumers are barred from paying.
An official from one of the distribution companies explained that forcing DisCos to absorb the cost of meters without corresponding tariff adjustments would negatively affect their financial records.
“When capital expenditure is imposed on DisCos, it must be recognised as allowable capex in tariff calculations. Otherwise, it weakens their balance sheets and creates long-term financial risk,” the official said.
Another operator noted that meter installation was removed from the direct responsibility of DisCos during previous reforms, questioning how the government now expects them to shoulder the cost.
“They say consumers should not pay installers, but who will? Installers are already asking questions. If the government is ready to pay them, that’s fine, but DisCos cannot be forced to take on responsibilities that were taken away from them,” the source said.
The operators described the minister’s pronouncement as populist and warned that it could worsen confusion within the sector if not clarified.
They also expressed concern that the directive could undermine the Meter Asset Providers scheme, which allows customers to purchase meters directly and receive refunds through energy credits.
According to the operators, many customers are now rejecting the MAP option after hearing claims that meters will be provided free to everyone, despite the fact that available free meters cannot cover the country’s metering deficit.
“The MAP scheme is still necessary because the free meters being imported cannot meet national demand. But the government’s messaging has created the impression that meters are unlimited and freely available, which is not the case,” one operator said.
They urged the government to clearly define which customers and areas would benefit from the free meters, while allowing others to continue using the MAP scheme.
The stakeholders further advised the government and electricity regulators to prioritise transparency and cost recovery in policy decisions to prevent further instability in the power sector.
While agreeing that consumers should not be burdened unfairly, the operators insisted that the government must clearly state who will fund meter procurement and installation to avoid accumulating debt within the sector.
They also warned that the directive has already heightened tension between customers and distribution companies, with many consumers demanding free meters based on the minister’s comments.
The DisCos called on the Federal Government to engage industry stakeholders before making public declarations, stressing that sustainable reforms require collaboration rather than political messaging.
