DisCos Reject FG’s “Free Meter” Plan: Why Nigeria’s Power Firms Are Pushing Back

Nigeria’s power sector just hit a new policy snag. The Federal Government, through the Minister of Power, Adebayo Adelabu, recently announced that prepaid electricity meters must be provided and installed free of charge to all electricity customers — a directive meant to accelerate metering, improve revenue collection, and eliminate estimated billing. 

On the surface, the plan sounds popular and progressive: no customer should pay for a device that measures their electricity usage. But Electricity Distribution Companies (DisCos) — the firms responsible for getting power to homes and businesses across Nigeria — are pushing back hard, describing the proposal as unrealistic and poorly thought out. 

What the Government Is Saying

During a high-profile inspection of imported smart meters at APM Terminals in Apapa, Lagos, Minister Adelabu insisted that the meters (procured under the World Bank-funded Distribution Sector Recovery Programme) should be installed free of charge for all customers, and that any official or installer who tries to collect payment would be prosecuted for extortion. 

The minister’s goal is clear: boost the number of Nigerians on prepaid meters to ensure accurate billing and reduce the chronic reliance on estimated bills — a longstanding gripe among electricity consumers. 

Why DisCos Are Uneasy

Despite the good intent, DisCos argue the policy fails to address the economics of meter provision and installation — and they’ve raised several critical concerns:

1. Somebody still has to pay for it. DisCos point out that although meters are labeled “free for customers,” they will still be paid for — over about 10 years — by the distribution companies themselves. That cost needs to show up somewhere, and DisCos are worried it will worsen their already fragile balance sheets if not properly structured as allowable capital expenditure. 

2. Who pays the installers? Meter technicians are not employees of DisCos; they’re third-party contractors. If customers are barred from paying for meters or installation, nobody has clearly been designated to cover those costs — government or private sector. DisCos want clarity on who picks up that bill. 

3. Confusion over existing schemes. Nigeria has an ongoing Meter Asset Providers (MAP) scheme, where customers can obtain meters and receive energy credits over time. DisCos worry that mandating “free” meters for everyone, without explaining who qualifies or how it works alongside MAP, will cause consumer confusion and disrupt the MAP system. 

4. Policy without planning? Operators described the minister’s pronouncements as political statements lacking comprehensive consultation or cost-recovery planning. They argue that policy decisions in the power sector must include mechanisms for cost recovery, financing, and stakeholder input if they are to succeed. 

A Sector in Search of Balance

At its core, the debate highlights a broader structural challenge in Nigeria’s power industry: how to reconcile socially desirable goals — like universal metering — with commercial realities under privatization. DisCos operate as private entities regulated by agencies like the Nigerian Electricity Regulatory Commission (NERC), and they must balance financial viability with policy directives. 

Just as NERC has previously taken steps to sanction DisCos over metering failures and estimated billing abuses, this new disagreement underscores the delicate policy architecture needed to overhaul Nigeria’s electricity system without destabilizing its operators. 

What Comes Next?

For now, DisCos are calling for urgent dialogue between the Federal Government, meter providers, installers, regulators, and the companies themselves to clarify:

Who will actually pay for meter supply and installation?

How will costs be structured without jeopardizing DisCos’ financial health?

How does the free meter initiative coexist with the MAP program?

This pushback doesn’t necessarily spell the end of the free meter idea, but it does show that good intentions alone won’t solve Nigeria’s chronic metering gap. Without clear funding pathways, enforcement strategies, and alignment with existing sector structures, the policy risks confusion, financial strain, and even slowed progress toward universal metering.