Electricity distribution companies (DisCos) have pushed back against the Federal Government’s directive that prepaid electricity meters be provided to customers at no cost, describing the policy as unrealistic and poorly thought out.
The directive, issued by the Minister of Power, Adebayo Adelabu, bars DisCos and meter installers from collecting any payment for meter installation. Adelabu gave the order during an inspection of newly imported smart meters at APM Terminals, Apapa, Lagos, stating that the meters—procured under the World Bank–funded Distribution Sector Recovery Programme—must be installed free of charge for all electricity customers, regardless of tariff band.
He warned that any DisCo official or installer found demanding payment would be prosecuted, insisting that free installation would improve billing efficiency and revenue collection across the power sector.
However, DisCo operators, speaking anonymously due to the sensitivity of the issue, said the minister’s pronouncement ignored key industry realities, particularly cost recovery and the role of third-party installers. They argued that although the meters are being described as “free,” the DisCos are expected to pay for them over a 10-year period—an obligation they say would strain their finances if not properly accounted for in electricity tariffs.
“Someone has to pay for the meters and the installation,” one DisCo official said. “If DisCos are required to bear this capital expenditure, it must be recognised as allowable capex and reflected in tariff calculations. Otherwise, it will further weaken already fragile balance sheets.”
Operators also noted that meter installers are not employees of the DisCos and questioned who would pay them if customers are barred from making payments. They recalled that DisCos were stripped of direct responsibility for metering during a previous administration, leaving the process largely in the hands of third-party providers.
“Installers are already asking who will pay them,” another operator said. “If the government intends to cover the cost, that should be clearly stated. But it is unrealistic to expect DisCos to shoulder it without a recovery mechanism.”
Several DisCo officials described the minister’s remarks as populist, warning that they could deepen financial challenges in the sector. They stressed that any policy affecting operations must clearly identify who bears the cost to avoid accumulating new debts.
The operators also raised concerns about the impact of the announcement on the Meter Asset Providers (MAP) scheme, which allows customers to purchase meters directly and receive refunds through energy credits over time. According to them, many customers are now rejecting the MAP option after hearing that meters are “free,” even though the government-supplied meters cannot meet nationwide demand.
“The free meters cannot cover the entire metering gap,” one source said. “MAP and government interventions have always run simultaneously. But this statement has confused customers and is already affecting local meter manufacturers and suppliers.”
They urged the government and the electricity regulator to clarify the scope of the free meter programme, including the areas and categories of customers that will benefit, to avoid further confusion and conflict between DisCos and consumers.
“We agree customers should not pay upfront, but the government must be clear about who pays and how the cost is recovered,” an operator said. “If cost recovery is ignored, operators will be forced to cut corners, and the sector will suffer.”
The DisCos also warned that the minister’s comments have already heightened customer agitation, with some consumers confronting distribution companies over meter charges.
“Government must always tell the public the truth,” one official said. “Saying meters are free for everyone without explaining the limitations is creating tension and undermining existing schemes. This approach is not helping the sector.”
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