DisCos Question Feasibility of Free Prepaid Meters, Cite Cost Recovery Concerns

DisCos Question Feasibility of Free Prepaid Meters, Cite Cost Recovery Concerns

Electricity distribution companies (DisCos) in Nigeria have raised concerns over the recent directive by Minister of Power, Adebayo Adelabu, that prepaid meters must be installed free of charge for all categories of electricity customers.

While the Federal Government banned DisCos and meter installers from charging consumers during an inspection of World Bank-funded smart meters at APM Terminals, Apapa, Lagos, the operators described the announcement as political and unrealistic, warning that it could jeopardize ongoing schemes and affect financial sustainability.

DisCo officials, speaking anonymously due to the sensitivity of the matter, explained that the so-called free meters will still be paid for by the DisCos over a 10-year period, raising questions about cost recovery and how meter installers, who are not DisCo staff, will be compensated.

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“Someone has to pay for the meters. The government expects DisCos to bear the cost, but we do not install the meters. Meter installers are independent contractors, and without clarity on who pays, the directive is problematic,” one operator said.

Officials also expressed concern over the impact on the Meter Asset Providers (MAP) scheme, which allows consumers to purchase meters and receive energy credits over time. The announcement that meters are free has led some consumers to reject the MAP option, potentially affecting local meter suppliers and disrupting the program.

The DisCos called on the government and the Nigerian Electricity Regulatory Commission (NERC) to provide clear guidelines on funding, installation, and distribution, emphasizing that cost recovery is essential to avoid financial losses and maintain operational efficiency.

Operators warned that public statements promising free meters without detailed implementation plans risk creating confusion and frustration among consumers, urging transparency to protect both the MAP scheme and the financial stability of the power sector.

DisCos Question Feasibility of Free Prepaid Meters, Cite Cost Recovery Concerns