DisCos Reject FG’s Free Meter Directive, Cite Reasons

Electricity distribution companies (DisCos) have raised concerns over the Federal Government’s directive that prepaid electricity meters should be provided to all customers at no cost.

Industry operators, who spoke on condition of anonymity due to the sensitivity of the issue, said the directive announced by the Minister of Power, Adebayo Adelabu, did not reflect consultations with key stakeholders, including DisCos, meter installers, and manufacturers.

Last Thursday, the Federal Government barred DisCos and installers from charging customers for meters, warning that anyone found collecting money would face prosecution. Adelabu issued the warning during an inspection of newly imported smart meters at APM Terminals, Apapa, Lagos.

According to the minister, the meters were procured under the World Bank–funded Distribution Sector Recovery Programme and must be installed free of charge for consumers across all tariff bands. He stressed that any form of payment demand would constitute an offence.

Adelabu said the initiative was aimed at improving billing accuracy and revenue collection in the power sector, adding that no DisCo official or third-party installer was permitted to collect money from consumers under any guise.

However, DisCo operators argued that the meters described as “free” would ultimately be paid for by the distribution companies over a period of about 10 years. They said this cost burden had not been clearly addressed by the government.

One DisCo official said that forcing companies to absorb the cost of meters and installation without clear cost recovery mechanisms would weaken their financial position.

“When DisCos are required to fund capital expenditure, such costs must be recognised as allowable capex and reflected in tariffs. If that does not happen, it damages their balance sheets,” the official said.

Operators also questioned who would pay independent meter installers, noting that installers are not employees of the DisCos.

“Meter installation is handled by third parties, not DisCo staff. If customers are not paying and the government is not paying, who settles the installers?” another operator asked, adding that DisCos were removed from direct metering responsibilities during earlier sector reforms.

Several operators described the minister’s comments as politically driven and lacking clarity on cost recovery.

“In the power sector, every intervention must clearly identify who bears the cost. Without that, debts will accumulate. Announcing that everything is free without resolving these issues creates unrealistic expectations,” one source said.

They also warned that the declaration could undermine the Meter Asset Providers (MAP) scheme, which allows customers to purchase meters directly and recover the cost gradually through energy credits.

According to the operators, customers have already begun rejecting the MAP option following the minister’s statement, believing that free meters will be available to everyone.

“The free meters being imported cannot close the entire metering gap. MAP has been running alongside government programmes because supply is still limited. Saying meters are free for all customers has created confusion and is discouraging participation in MAP,” a DisCo official said.

The operators urged the government and the electricity regulator to clarify the scope of the free meter programme, including the categories of customers and locations covered, to avoid further disruption.

They also called for greater transparency in communicating sector policies to the public.

“Customers are already confronting DisCos based on the belief that meters must be free for everyone. If the government wants to subsidise meters, it should state clearly how it will be funded. Cost recovery cannot be ignored,” another operator said.

The DisCos warned that without clear answers on funding and reimbursement, the policy could create new financial and operational challenges across the electricity value chain.