Electricity distribution companies have voiced concerns over the directive by the Minister of Power, Adebayo Adelabu, that prepaid meters should be provided free of charge to all electricity consumers, describing the move as politically driven and poorly thought out.
Industry operators, who spoke anonymously due to the sensitive nature of the issue, said the minister made the announcement without consulting key stakeholders, particularly meter installers and providers.
On Thursday, the Federal Government prohibited distribution companies and installers from charging any fees for meters, warning that anyone found extorting customers would be prosecuted. The directive followed Adelabu’s inspection of newly imported smart meters at APM Terminals, Apapa, Lagos, procured under the World Bank–funded Distribution Sector Recovery Programme.
The minister stated that the meters must be installed at no cost to consumers, regardless of tariff band, stressing that any demand for payment would constitute an offence.
However, DisCo officials disclosed that the meters described as “free” would still be paid for by the distribution companies over a 10-year period. They questioned why DisCos should be made to bear both the cost of the meters and their installation.
According to them, meter installers are independent contractors, not employees of the DisCos, and must be compensated for their services.
“One way or another, someone has to pay for these meters. The government expects DisCos to shoulder the cost of the so-called free meters and recover it over 10 years. When DisCos are required to fund capital expenditure, it must be recognised as allowable capex and reflected in tariffs; otherwise, it weakens their financial position,” an official said.
Another operator noted that DisCos were previously removed from direct involvement in metering during the tenure of a former power minister, making it unrealistic to now compel them to fund installations.
“They said DisCos should not be involved in metering, and now we are seeing the consequences. If the government wants installers to be paid, it should clearly state who will bear that cost. I doubt any DisCo will willingly take on that burden,” the source said.
The officials described the minister’s comments as populist, warning that they ignored the principle of cost recovery.
“Any policy in the power sector must clearly identify who bears the cost. Without that, debts will continue to pile up. Instead of consulting stakeholders, the government made unrealistic promises, creating the impression that meters are sufficient for everyone, which is not the case,” one source said.
They also warned that the declaration was already disrupting the Meter Asset Providers (MAP) scheme, which allows customers to purchase meters and receive refunds through energy credits.
“Many consumers are now rejecting the MAP scheme because they believe meters are free. Yet the free meters cannot cover the existing metering gap. The government should clarify which areas and categories are eligible, so others can still access meters through MAP,” an operator said.
The stakeholders urged the government and regulators to prioritise cost recovery and stakeholder engagement in policy decisions.
“If installers are not to be paid by consumers, then who pays them — the DisCos or the Ministry of Power? These are questions that must be answered. Sustainable reforms require realistic planning, not political pronouncements,” they concluded.
