Power Firms Question Feasibility of FG’s Free Meter Directive

Electricity distribution companies have raised concerns over the Federal Government’s directive that prepaid meters be provided free of charge to all customers, describing the announcement as politically motivated and impractical.

The Minister of Power, Adebayo Adelabu, had on Thursday during an inspection of newly imported smart meters in Lagos, banned DisCos and installers from collecting payment for meters, warning that offenders would be prosecuted.

He stated that the meters, procured under a World Bank-funded programme, must be installed free for all consumers regardless of their classification.

However, operators who spoke anonymously due to the sensitivity of the matter argued that the declaration disregarded stakeholder consultation and cost recovery principles.

According to the DisCos, the meters labelled as “free” would actually be paid for by the distribution companies over a ten-year period. They questioned who would bear the cost of installation, noting that installers are not DisCo employees.

“When you ask the DisCos to pay for any capital expenditure, you have to allow it when computing their tariffs; otherwise, it makes their balance sheets toxic,” one operator stated.

Another added, “They said the DisCos have no business with metering. This is the result we are seeing today… If the government can pay installers, no problem, but I’m not sure any DisCo will volunteer to pay.”

The officials warned that the minister’s announcement could undermine the existing Meter Asset Providers scheme, which allows customers to purchase meters and be refunded through energy credits. They expressed concern that customers are now refusing to participate in MAP, believing all meters should be free.

“People are now rejecting the Meter Asset Providers scheme because they have heard that meters are free… This latest statement is now affecting MAP because people don’t know the difference,” a DisCo source explained.

The operators urged the government and regulator to prioritise cost recovery in policy decisions and to clarify the limitations of the free meter rollout to avoid misleading the public and destabilising the sector.