‎DisCos Shun FG’s Free Prepaid Meter Directive, Question Cost Recovery, Stakeholder Engagement

Electricity distribution companies (DisCos) have expressed strong reservations over the recent directive by the Minister of Power, Mr. Adebayo Adelabu, mandating that prepaid electricity meters be provided free of charge to all categories of electricity consumers across Nigeria.

‎Operators within the power distribution sector, who spoke anonymously due to the sensitivity of the issue, described the minister’s pronouncement as largely political and lacking adequate consultation with key stakeholders, particularly meter installers, manufacturers, and Meter Asset Providers (MAPs).

‎The controversy followed a directive issued by the Federal Government on Thursday, banning electricity distribution companies and meter installers from collecting any form of payment for prepaid meters. The government further warned that any DisCo officials or installers found extorting customers would face prosecution.

‎Minister Adelabu issued the warning during an on-site inspection of newly imported smart meters at APM Terminals, Apapa, Lagos. He stated that the meters were procured under the World Bank–funded Distribution Sector Recovery Programme (DSRP) and must be installed for consumers at no cost.

‎According to the minister, the initiative is unprecedented and designed to improve billing efficiency and revenue collection across the power sector.

‎“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. It has to be installed free of charge so that billings and collections will improve for the sector,” Adelabu said.

‎He further stressed that all electricity customers, irrespective of their service bands, would benefit from the free meter distribution.

‎However, DisCo operators have faulted the declaration, arguing that while the meters are being tagged as “free” to consumers, the financial burden would ultimately be borne by the distribution companies over a projected period of 10 years.

‎According to them, the government’s expectation that DisCos should shoulder the cost of meter procurement and installation without clear cost recovery mechanisms could worsen their already fragile financial position.

‎“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, it must be treated as allowable capex and factored into tariffs. Otherwise, it makes their balance sheets toxic,” one DisCo official stated.

‎Another operator questioned who would pay independent meter installers, noting that installers are not staff of the distribution companies.

‎“Meter installers are not employees of the DisCos. They are already asking who will pay them if consumers are barred from paying. Did the minister consider this? The role of metering was taken away from DisCos during the tenure of former Power Minister, Babatunde Fashola. So, if DisCos are not installing meters, who pays the installers?” the operator asked.

‎The operators warned that without a clear funding framework, the directive could stall installations and create further confusion in the sector.

‎Several stakeholders also described the minister’s remarks as populist, cautioning that such statements could raise unrealistic public expectations.

‎“The statement was just a populist declaration from a politician. We are not even sure if the President mandated that message. Everything cannot be free without addressing cost recovery. In the power sector, someone must bear the cost to avoid debt accumulation,” another source said.

‎They further criticised the lack of stakeholder engagement before the announcement, arguing that the government should have consulted DisCos, meter manufacturers, and installers to design a sustainable framework.

‎“The government should sit with stakeholders if the intention is to ensure consumers do not pay directly. But instead, unrealistic promises were made. The meters are coming in batches, yet the public has been made to believe there are enough meters for everyone, which is not the reality,” the source added.

‎The DisCos also warned that the declaration could severely undermine the existing Meter Asset Providers (MAP) scheme, which allows customers to purchase meters directly and receive refunds through energy credits over time.

‎“People are now rejecting the MAP scheme because they have heard that meters are free. The minister created a wrong narrative. The free meters cannot cover the entire metering gap. MAP exists because government-provided meters are insufficient,” a DisCo operator explained.

‎According to the operators, the free-meter narrative has already begun to disrupt the MAP ecosystem, threatening local meter manufacturers and suppliers.

‎“The government should clearly state the areas and categories of customers that will benefit from the free meters. Those not captured should be informed to continue with MAP. But with the claim that free meters are for everyone, nobody wants to buy meters anymore,” the operator added.

‎The stakeholders urged the Ministry of Power and the electricity regulator to prioritise transparency and cost recovery in policy decisions.

‎“If installers are not to be paid by consumers, who will pay them—the DisCos or the Federal Government? These are critical questions. Every cost incurred must be accounted for and recovered. If operators cannot recover costs, they will be forced to cut corners,” another official warned.

‎They also expressed concern that the minister’s comments have already heightened tensions between consumers and DisCos.

‎“We must always tell the people the truth. Customers are now agitated and confronting DisCos because they were told meters are free for all. That is simply not feasible. The minister’s statement is not protecting the MAP scheme; rather, it is putting it in jeopardy. We are already seeing the consequences,” one official concluded.

‎As debates continue, industry players insist that any metering reform must balance consumer protection with economic realities to ensure the long-term sustainability of Nigeria’s power sector.