Meter rollout triggers tariff row between FG, DisCos

A fresh dispute has erupted between the Federal Government and electricity distribution companies (DisCos) over who will bear the cost of prepaid meters being installed nationwide under a World Bank–funded programme.

The Bureau of Public Enterprises (BPE) has clarified that although the meters are being installed for consumers without upfront payment, their costs will ultimately be recovered through electricity tariffs.

The disagreement followed a directive by the Minister of Power, Adebayo Adelabu, ordering that prepaid meters procured under the Distribution Sector Recovery Programme be installed free of charge. He warned that any official or installer demanding payment from consumers would face prosecution.

However, DisCos questioned the directive, arguing that while customers may not pay directly, the companies would still shoulder the costs over time, raising concerns about installation expenses and long-term cost recovery.

Speaking in Lagos at the signing of a ₦501bn bond issuance to settle power sector debts, BPE Director-General Ayo Gbeleyi rejected claims that DisCos were being asked to repay meter costs over 10 years. He accused operators of spreading misleading information about the government’s “free metering” initiative.

Gbeleyi explained that meter costs, like other infrastructure investments such as transformers and feeder pillars, are typically embedded in tariffs.

“Every component of investment that goes into the DisCos gets recouped through the tariff structure. So whether it is a transformer or a meter, we as consumers ultimately pay for those investments through tariffs,” he said.

He added that the Federal Government’s intervention is backed by a concessional 20-year World Bank loan, with a five-year principal moratorium and two-year interest moratorium, describing it as one of the most favourable financing arrangements ever secured for the sector.

According to him, about 3.22 million meters are being supplied to DisCos under the $500m Distribution Sector Recovery Programme to strengthen infrastructure and improve liquidity. Out of an initial batch of 1.4 million units, over 600,000 meters have arrived, with nearly 75,000 already installed at no cost to consumers.

“Customers are not meant to pay for these meters,” Gbeleyi stressed, noting that the initiative targets Nigeria’s 5.9 million unmetered electricity users.

He said the World Bank programme would be complemented by another intervention under the Presidential Metering Initiative, expected to deliver an additional 2.61 million meters.

Despite the assurances, DisCos remain skeptical. Operators, speaking anonymously, described the minister’s directive as politically driven and lacking proper consultation with stakeholders, including meter manufacturers and installers.

They argued that someone must still bear the installation costs and warned that if such expenses are not reflected in tariff calculations, it could weaken the companies’ finances.

“When you ask the DisCos to pay for any capital expenditure, you must recognise it in the tariff. Otherwise, their balance sheets become toxic,” one operator said.

Others questioned who would pay independent installers if consumers are barred from making payments, noting that many installers are not DisCo staff.

While DisCos maintain that the financial burden will eventually fall on them, Adelabu has insisted that consumers must not be charged.

“It is unprecedented that these meters are to be installed free of charge. Nobody should collect money from any consumer. It is illegal,” the minister said during an inspection of imported smart meters at Apapa Port, Lagos.

The standoff highlights ongoing tensions between regulators and operators in the power sector, even as the Federal Government insists the metering drive is aimed at protecting consumers, closing the metering gap and improving billing efficiency nationwide.