Electricity distribution companies (DisCos) have raised concerns over the recent directive by the Minister of Power, Adebayo Adelabu, mandating that prepaid electricity meters be provided free of charge to all consumers, regardless of category.

Speaking anonymously due to the sensitivity of the issue, several industry operators described the directive as impractical and politically motivated, arguing that it failed to reflect consultations with key stakeholders such as DisCos, meter installers and manufacturers.

Last Thursday, the Federal Government announced a ban on electricity distribution companies and third-party installers from charging customers for meter installation. The government also warned that any DisCo official or installer found demanding payment would face prosecution. The announcement was made by Adelabu during an inspection of newly imported smart meters at APM Terminals in Apapa, Lagos.

According to the minister, the meters were procured under the World Bank–supported Distribution Sector Recovery Programme and are to be installed at no cost to consumers. He stressed that any form of payment demanded from customers would be considered illegal.

Adelabu stated that the initiative would cover all electricity users, irrespective of their service band. He emphasised that free installation was necessary to improve billing efficiency and revenue collection across the power sector.

However, DisCo operators countered the claim, saying the so-called “free” meters would ultimately be paid for by the distribution companies over a 10-year period, raising concerns about cost recovery and financial sustainability.

Industry sources questioned why the government expects DisCos to absorb the cost of metering and installation, noting that meter installers are independent contractors and not employees of the distribution companies.

“Someone has to pay for the meters and the installation. The government is asking the DisCos to carry the burden over a 10-year period, but any capital expenditure must be recognised in tariff calculations. If it’s not allowed as recoverable cost, it will further weaken already fragile balance sheets,” one DisCo official explained.

Another operator said the directive failed to address who would pay the installers now barred from collecting fees from consumers.

“Meter installation was taken away from the DisCos years ago. Installers are private entities. If consumers are not paying and installers are not DisCo staff, who settles their bills? These are critical questions that were not considered before making such a sweeping announcement,” the source said.

The operators also criticised the minister’s remarks as populist, warning that the lack of clarity could worsen financial challenges in the power sector.

“The statement sounded good politically, but there was no mention of cost recovery. In this sector, every expense must be accounted for. If nobody pays, debt will continue to pile up. Stakeholders should have been consulted before making promises to the public,” another source said.

They further warned that the declaration could undermine the Meter Asset Provider (MAP) scheme, which allows customers to purchase meters directly and receive refunds through energy credits over time.

“Customers are already rejecting the MAP option because they believe meters are now completely free. The reality is that the free meters being imported cannot cover the existing metering gap. MAP is still necessary, but this announcement has created confusion and uncertainty for consumers and local meter suppliers,” an operator noted.

The DisCos urged the government and industry regulator to clarify the scope of the free meter initiative, including the number of meters available, the areas to be covered and the categories of customers eligible.

They also called for transparency in explaining who would bear the cost of installation and how expenses would be recovered.

“We agree that consumers should not be exploited, but the government must clearly state who will pay for the meters and installation. If it is to be subsidised, that should be made clear. If DisCos are expected to pay, there must be a defined recovery mechanism. Otherwise, operators will be forced to cut corners,” a source warned.

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The operators concluded that while improving metering is crucial for the power sector, unrealistic promises and poor communication risk fuelling public anger and further destabilising an already struggling industry.