DisCos Reject Federal Government’s Free Metering Initiative

Electricity distribution companies have pushed back against the Federal Government’s declaration that prepaid meters must be provided free to all consumers, expressing concern that the directive ignores the financial and operational realities of the power sector.

Industry operators, who spoke anonymously due to the sensitivity of the issue, said the announcement by the Minister of Power, Adebayo Adelabu, amounted to a political statement that failed to reflect consultations with key stakeholders, including distribution companies, meter installers and manufacturers.

The controversy followed a directive issued on Thursday in which the Federal Government barred electricity distribution companies and installers from charging customers for meters. Adelabu gave the order during an inspection of newly imported smart meters at APM Terminals in Apapa, Lagos, warning that any official or installer caught demanding payment would face prosecution.

The minister said the meters were procured under the World Bank–funded Distribution Sector Recovery Programme and must be installed for consumers at no cost, regardless of their electricity band. He stressed that the policy was aimed at improving billing accuracy and revenue collection across the sector.

Adelabu described the initiative as unprecedented, insisting that no consumer should be asked to pay any amount, directly or indirectly, for meter installation. He said any request for payment would constitute an offence.

However, distribution company operators countered that the so-called free meters would still be paid for by the DisCos over a period of about 10 years, raising questions about cost recovery and financial sustainability. They argued that the government was effectively shifting the burden of payment to DisCos without clearly stating how those costs would be recovered.

According to the operators, meter installation is not carried out by DisCo staff but by independent installers, who must also be paid. They questioned who would bear these costs if customers were barred from making payments.

One senior industry source explained that when DisCos are required to fund capital projects, such expenses are treated as allowable capital expenditure and must be factored into tariff calculations. Without this, the source said, the financial health of the companies would deteriorate further.

Another operator noted that the responsibility for metering was removed from DisCos years ago, leaving them dependent on third-party installers and Meter Asset Providers. He warned that compelling DisCos to absorb installation costs without a clear reimbursement framework could stall the entire process.

Several operators described the minister’s remarks as populist and cautioned that they could deepen existing challenges in the sector. They said any policy that ignores cost recovery risks creating fresh debts and undermining long-term reforms.

They also warned that the declaration threatens the Meter Asset Providers (MAP) scheme, which allows customers to purchase meters directly and recover the cost through energy credits over time. According to them, many customers have already begun rejecting the MAP option after hearing that meters would now be free for everyone.

Operators argued that the free meters being imported cannot close the existing metering gap and that the MAP scheme remains essential. They said the government should clearly communicate which categories of customers and locations would benefit from the free meters, while others continue under the MAP arrangement.

Industry stakeholders urged the government and regulators to engage more openly with DisCos, meter manufacturers and installers before making sweeping public pronouncements. They stressed that transparency about funding, payment responsibilities and cost recovery is crucial to avoid confusion and rising tension between consumers and service providers.

They also expressed concern that customers have already begun confronting DisCos over the announcement, warning that unclear messaging could further strain relationships and disrupt ongoing metering efforts.

While reiterating support for efforts to ease the burden on consumers, the operators insisted that someone must ultimately pay for meters and installation. They called on the government to clearly state whether it intends to subsidise the process or provide a reimbursement mechanism, noting that without this clarity, the directive risks creating more problems than it solves.