DisCos Raise Concerns Over FG’s Free Prepaid Meter Directive
Electricity distribution companies (DisCos) have expressed doubts over the Federal Government’s directive that prepaid meters must be provided free of charge to all categories of electricity consumers, sources told The Punch.
The concerns come after Adebayo Adelabu, Minister of Power, on Thursday, banned DisCos and meter installers from collecting any payment for newly imported smart meters.
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Adelabu issued the warning during an inspection at APM Terminals, Apapa, Lagos, saying the meters, procured under the World Bank-funded Distribution Sector Recovery Programme, must be installed free of charge. He stressed that any demand for money would be treated as an offence.
“I want to mention that it is unprecedented that these meters are to be installed and distributed to consumers free of charge—free of charge! Nobody should collect money from any consumer. It is an illegality. It is an offence for the officials of distribution companies across Nigeria to request a dime before installation; even the indirect installers cannot ask consumers for a dime,” Adelabu said.
However, operators, speaking anonymously due to the sensitivity of the matter, said the minister’s announcement did not consider practical realities, particularly regarding who would bear the cost of the meters and installation. According to them, the DisCos would still have to pay for the meters over a 10-year period, a responsibility that is challenging because installers are not DisCo employees.
“Those meters you see, someone has to pay for them, and the government expects the DisCos to bear the cost of the so-called free meters. They said the DisCos can pay it over 10 years. When you ask the DisCos to pay for any capital expenditure, we call it allowable capex. You have to allow it when computing their tariffs; otherwise, it makes their balance sheets toxic,” one official said.
Another operator added: “Meter installers are not staff of the DisCos. They are already asking who will pay them if the consumers do not pay. Did the minister consider all those? If the government can pay installers, no problem, but I’m not sure any DisCo will volunteer to pay them.”
The officials described Adelabu’s comments as populist, stressing that the government should have consulted stakeholders, including DisCos and meter manufacturers, before making the announcement.
“The statement was just a populist statement from a politician. We are not sure if the President sent him that message. He said everything should be free; where is the position of cost recovery? Anything you do in the power sector, you have to first consider who bears the cost. Somebody has to bear the cost to avoid debt piling up,” one source said.
DisCos also warned that the free meter policy could undermine the ongoing Meter Asset Providers (MAP) scheme, which allows customers to purchase meters directly and pay over time. “People are now rejecting the MAP scheme because they have heard that meters are free. The government should clarify and let people know the areas and categories of consumers that can get free meters,” an operator said.
Stakeholders urged the government and the regulator to always consider cost recovery in their plans. “If he says meter installers should not be paid, who’s going to pay them? The DisCos or the Ministry of Power? Every penny has to be accounted for and recovered. The purpose of doing business is cost recovery; if you cannot recover your cost, you will be cutting corners,” another operator stressed.
They also warned that the directive has caused confusion among consumers, with some already confronting DisCo staff over the claim that meters are free for all customers.
The operators called on the government to provide clear guidance on the rollout of free meters to prevent disruption to existing schemes and to ensure sustainable operations in the sector.
