DISCOS QUESTION FG DIRECTIVE ON FREE PREPAID METERS, WARN OF COST AND IMPLEMENTATION CHALLENGES
Read Time:2 Minute, 22 Second
By Aishat Momoh. O.
Power distribution companies (DisCos) have expressed reservations over the Federal Government’s directive that prepaid electricity meters must be provided free of charge to all categories of consumers, warning that the policy raises serious cost, operational and sustainability concerns.
Operators who spoke anonymously said the directive, issued by the Minister of Power, Adebayo Adelabu, failed to adequately consider the roles of key stakeholders in the electricity value chain, particularly meter installers and asset providers.
On Thursday, the Federal Government banned electricity distribution companies and meter installers from collecting any form of payment for prepaid meters, warning that any official or installer found extorting customers would face prosecution. Adelabu made the declaration 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 electricity bands. He stressed that any demand for payment would be treated as an offence.
However, DisCo operators said the meters described as “free” would ultimately be paid for by the distribution companies over a period of up to 10 years, arguing that the cost burden was simply being shifted rather than eliminated.
“Those meters are not free. Someone has to pay for them, and the government expects the DisCos to shoulder the cost over time,” one operator said. “If you impose capital expenditure on DisCos without recognising it in tariffs, you make their balance sheets toxic.”
The operators noted that meter installers are not employees of the DisCos and questioned who would pay for installation if consumers are barred from doing so. They recalled that the responsibility for metering was taken away from DisCos years ago, creating a complex structure involving third-party Meter Asset Providers (MAPs).
Several operators described the minister’s pronouncement as populist, warning that it could undermine the MAP scheme, which allows customers to purchase meters directly and recover costs through energy credits.
“People are now rejecting the MAP scheme because they believe meters are completely free,” an operator said. “The reality is that the free meters cannot cover the existing metering gap. Without proper clarification, local meter suppliers and installers will be badly affected.”
The DisCos urged the Federal Government and electricity regulators to clearly address issues of cost recovery and stakeholder responsibility, warning that failure to do so could lead to mounting debts and disruptions in the sector.
“We agree consumers should not be exploited, but the government must clearly state who pays and how costs will be recovered,” another operator said. “If cost recovery is ignored, the sector will suffer in the long run.”
The operators also cautioned that the directive has already heightened tensions between customers and distribution companies, as many consumers now expect immediate, free meter installation nationwide.
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