Energy Crisis: Nigeria’s DisCos reject government’s free prepayment electricity meters

*Chief Adebayo Adelabu, Minister for Power, warns the electricity Distribution Companies, stating ‘it is an illegality. It is an offence for the officials of distribution companies across Nigeria to request a dime before installation’, but the service providers think otherwise

Isola Moses | ConsumerConnect

Chief Adebayo Adelabu, Honourable Minister for Power, has said prepayment electricity meters must be given and installed for free for all categories of consumers.

Adelabu issued stated this during an on-site inspection of newly imported smart meters at APM Terminals, at Apapa, in Lagos State.

The electricity Distribution Companies (DisCos), however, have expressed reservations about the practicality of implementing Chief Adelabu’s directive in the power ecosystem.

ConsumerConnect reports the Federal Government last Thursday banned electricity providers and installers from collecting any form of payment for meters.

The government warned that DisCo officials and installers found extorting electricity consumers would be prosecuted.

The DisCos, however, reportedly, dismissed the Minister’s directive as a mere a political statement without considering the inputs of other stakeholders, especially the installers and meter providers in terms of additional funds.

Adelabu also explained the electricity meters were procured under the World Bank–funded Distribution Sector Recovery Programme.

The Minister emphasised the meters must be installed for consumers free of charge.

He also warned that any demand for money would be treated as an offence.

Minister: It’s an illegality to collect money for meters, installations from consumers

Adelabu equally said the prepayment electricity meters would be given to all consumers irrespective of their bands.

He further stated: “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.

“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.”

DisCos ask Minister: Who is paying for prepayment meters, installations?

Responding to Minister Adelabu’s directive on procurement and installation of electricity meters, the DisCos operators said the meters, which the Nigerian Government tagged as “free” would still be paid for by the DisCos within a period of 10 years.

The power providers disclosed that the DisCos could not be the ones paying for meter installation, The Punch report stated.

They also wondered why the Federal Government wants them to bear the cost of installation.

Electricity meter installers are not DisCo workers, and someone has to bear the cost of installation, power providers averred.

A DisCo official reportedly said: “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.

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.”

Another operator was quoted to have remarked: “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?

“We, the DisCos, are not the ones installing meters. That role was taken away from the DisCos when Babatunde Fashola was the Power Minister.”

The power operator also stated: “They said the DisCos have no business with metering. This is the result we are seeing today. “Assuming the DisCos are the ones installing meters, you can force them to pay.”

Adelabu’s directive a populist statement from a politician, say DisCos

The DisCo official further commented: “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 DisCos, report said, described Adelabu’s comment as a populist statement from a politician.

The DisCo operator asserted: “The statement was just a populist statement from a politician. We are not sure if the President sent him that message.

“He (Minister) said everything should be free; where is the position of cost recovery?

“Anything you do in the power sector; you have to first consider who bears the cost. Somebody has to bear the cost to avoid debt piling up.”

The top official of the power firm also said: “The government ought to sit with the DisCos and the meter manufacturers to seek advice if the plan is to make sure the people don’t bear any cost, and we will come up with our various contributions.

“But instead of doing that, the government would go and make unrealistic promises to the public.

“For instance, the meters are coming in batches, but you have made the masses believe that there are enough meters for everyone. That’s not the reality.”

According to the operators, the free meters declaration would jeopardise the Meter Asset Providers (MAP) scheme, which allows the sale of meters to “individuals who desire them.”

They further argued: “People are now rejecting the Meter Asset Providers scheme because they have heard that meters are free.

“The Minister came up with a very wrong narrative. Has he sat down with stakeholders before going out to say meters are free?

“How can you say you have enough meters for over five million people? We still have the MAP scheme ongoing, whereby the meter provider sells directly to the customer. “MAP is still there because the free meters they are bringing cannot fill the metering gap.”

One of the DisCo operators remarked: “So, MAP has been going on simultaneously over the years.

“But this latest statement is now affecting MAP because people don’t know the difference.

“The government should clarify and let the people know that the free meters can’t go round everyone; they should state the areas that can get the free meters and the category of customers, so that others not captured will know they will have to go for MAP by getting the meters with their money and get a refund through energy credits over time.”

The operator stated: “But with the Minister’s statement that the free meters are for all customers, nobody will go for MAP again, and I don’t know how badly this will affect local meter suppliers in the MAP scheme.”

The industry stakeholders yet urged the Federal Government, and the electricity regulator (NERC) to always consider cost recovery in their plans.

The official added: “If he (Adelabu) says meter installers should not be paid, who’s going to pay them? The DisCos or the Ministry of Power? Those are the questions the government should answer.

“The regulator should always talk about cost recovery. From the look of things, the Minister does not seem to care much about cost recovery, and he’s happy making political statements.”

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