…“DisCos are expected by the government to shoulder the cost, with repayment spread over a 10-year period.
ABUJA, NIGERIA- The iNews Times | Electricity distribution companies have raised concerns over the directive issued by the Minister of Power, Adebayo Adelabu, mandating that prepaid meters be provided free of charge to all categories of electricity consumers.
Speaking anonymously due to the sensitive nature of the issue, DisCo operators said the minister’s pronouncement appeared to be politically motivated and was made without adequate consultation with key stakeholders, particularly meter installers and service providers.
On Thursday, the Federal Government prohibited electricity distribution companies and meter installers from charging customers for prepaid meters, warning that any DisCo official or installer found extorting consumers would face prosecution. Adelabu issued this warning during an inspection of newly imported smart meters at APM Terminals in Apapa, Lagos.
According to the minister, the meters were procured under the World Bank–funded Distribution Sector Recovery Programme and must be installed for consumers at no cost. He emphasized that any request for payment would constitute an offence.
The meters, Adelabu said, would be distributed to all electricity customers regardless of their service band.
He described the initiative as unprecedented, stressing that neither DisCo officials nor third-party installers were permitted to demand payment. He added that free installation would enhance accurate billing and revenue collection across the power sector.
However, DisCo operators told The iNews Times that although the meters are being described as “free,” the cost would ultimately be borne by the distribution companies over a 10-year repayment period. They questioned why the government expects DisCos to shoulder the cost of meter installation, noting that installers are not employees of the distribution companies.
“Someone has to pay for these meters,” one operator said. “The government expects DisCos to cover the cost and spread payment over 10 years. But any capital expenditure must be recognised as allowable capex and factored into tariff calculations; otherwise, it damages the companies’ financial health.”
Another operator pointed out that meter installers are independent contractors who still expect to be paid, asking who would cover those costs if consumers are barred from paying. He noted that DisCos no longer handle meter installations, a responsibility removed during the tenure of a former power minister.
“If the government intends to pay installers, that’s fine. But I don’t see DisCos volunteering to do so,” the operator added.
Several stakeholders described the minister’s statement as populist, arguing that it failed to address cost recovery, a critical issue in the power sector.
“They declared everything free without explaining who bears the cost. That’s unrealistic,” one source said. “The government should have consulted DisCos and meter manufacturers before making such promises. The meters are arriving in batches, yet the public has been made to believe there are enough for everyone, which is not the case.”
Operators also warned that the declaration could undermine the Meter Asset Providers (MAP) scheme, which allows customers to purchase meters directly.
“Customers are now rejecting the MAP scheme because they believe meters are free,” an operator said. “The free meters cannot cover the entire metering gap, which is why MAP has continued alongside government interventions. But this statement has created confusion and is discouraging participation in the scheme.”
They urged the government to clarify which customers and areas would benefit from the free meters, so others would understand the need to obtain meters through MAP and receive refunds over time via energy credits.
Stakeholders further called on the government and regulators to prioritize cost recovery in policy decisions.
“If consumers are not to pay, then who will, DisCos or the Ministry of Power?” one operator asked. “If operators are forced to absorb the costs without a recovery mechanism, it will lead to financial strain and inefficiencies.”
The DisCos also appealed to the government to manage public expectations, noting that customers are already confronting distribution companies over the minister’s remarks.
“The truth must be told,” an official said. “The minister’s comments are creating tension and putting the MAP scheme at risk. Customers now believe meters must be free for everyone, which simply isn’t feasible. We’ll have to see how the situation unfolds.”
