Electricity distribution companies (DisCos) have pushed back against the federal government’s directive that prepaid electricity meters be provided free of charge to all customers, citing concerns over funding for the meters and their installation
Several operators, speaking anonymously, said the Minister of Power, Adebayo Adelabu’s order did not clearly explain how the costs would be covered, particularly for meter installers and suppliers.
On Thursday, federal authorities ordered that neither DisCos nor meter installers should collect any payment from consumers for prepaid meters, warning that violators would face prosecution.
“I want to mention that it is unprecedented that these meters are to be installed and distributed to consumers free of charge—free of charge! Nobody should collect money from any consumer,” Adelabu said. “It is an illegality. It is an offence for the officials of distribution companies across Nigeria to request a dime before installation; even the indirect installers cannot ask consumers for a dime. It has to be installed free of charge so that billings and collections will improve for the sector.”
However, the DisCo operators told The PUNCH that the so-called “free meters” would ultimately be paid for by the distribution companies, with the government proposing that costs be recouped over a ten-year period.
“Those meters you see, someone has to pay for them, and the government expects the DisCos to bear the cost of the so-called free meters. They said the DisCos can pay it over 10 years,” one operator said. “When you ask the DisCos to pay for any capital expenditure, we call it allowable capex. You have to allow it when computing their tariffs; otherwise, it makes their balance sheets toxic.”
Operators also raised concerns about installation costs, pointing out that meter installers are not employees of the DisCos. “We need to know that meter installers are not staff of the DisCos. They are already asking who will pay them if the consumers do not pay. Did the minister consider all those? You said the people should not pay the installers; who should pay them?” the source added.
They noted that the responsibility for metering was removed from DisCos during Babatunde Fashola’s tenure as power minister, meaning distribution companies do not handle meter installations. “Assuming the DisCos are the ones installing meters, you can force them to pay. We will all see the outcome of that pronouncement in the coming days. If the government can pay installers, no problem, but I’m not sure any DisCo will volunteer to pay the installers,” the operator concluded.
DisCos say the directive, though well-intentioned, raises practical challenges that must be addressed to avoid disrupting the sector’s financial stability.
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