Navigating Nigeria’s Metering Landscape: Clarity on Free vs. Paid Electricity Meters
A significant clarification has emerged from the Nigerian Electricity Regulatory Commission (NERC) regarding the ongoing rollout of electricity meters across the nation. Addressing widespread confusion, NERC has explained that while certain government-funded metering initiatives provide meters free of charge at the point of installation, other options remain available for consumers who prefer or require immediate metering solutions. This distinction is crucial in light of recent directives and potential misconceptions surrounding the Federal Government’s metering programmes and the prohibition of illegal charges by electricity distribution companies (DisCos).
Understanding Government-Funded Metering: The DISREP Initiative
The primary driver behind the free meter provision is the Distribution Sector Recovery Programme, widely known as DISREP. NERC Chairman, Musiliu Oseni, elaborated on this during a recent radio interview, emphasizing that meters supplied under DISREP are entirely funded by the Federal Government. Consequently, these meters are to be provided to customers at no cost.
“The meter provided by the government is 100 per cent free,” Oseni stated. “The DISREP meter is free because it is paid for by the government. The DisCos have been rolling it out. Of course, they will pay the money back, but the loan comes at a very minimal interest rate. So, through the tariff, DisCos are not going to charge customers because of the meter. They are to provide it free of charge to the customers, and that is what the minister and the DG of BPE actually meant. And it is 100 per cent free.”
This means that electricity distribution companies are strictly prohibited from demanding any upfront payment from consumers for meters deployed under the DISREP programme. The cost recovery mechanism for these meters is designed to be integrated into future electricity tariffs, rather than requiring immediate out-of-pocket expenses from customers.
“If you get the free meter, you are not to be paid anything,” Oseni reiterated. “Ideally, you are meant to pay for the cost of the meter given to you through the tariffs. So, no DisCo is allowed to collect money from customers because of a DISREP meter.”
The Meter Asset Provider (MAP) Scheme: An Alternative Option
For consumers who find the rollout of free DISREP meters to be too time-consuming or face logistical challenges in their specific areas, the Meter Asset Provider (MAP) scheme continues to be an available alternative. Under this scheme, customers have the option to pay for a meter if they are unable or unwilling to wait for the free installation.
“There is still the Meter Asset Provider,” Oseni explained. “Those residing in an area where it will take time before the free installation gets to them, and they cannot wait, can decide to pay for a Meter Asset Provider. But they must ensure that they pay into a company, not an individual.”
Consumers opting for the MAP scheme are advised to exercise caution and ensure that any payments are made directly to the designated company, not to individual agents. This measure is intended to prevent fraudulent activities and ensure that payments are properly accounted for.
Identifying Free Meters and Consumer Vigilance
NERC is encouraging consumers to be vigilant and to correctly identify the meters being provided under the free government initiative. A key identifier for DISREP meters is an inscription. “If you look at the free meters carefully, there is an inscription. After the name of the DisCo, you will see DISREP,” Oseni advised. This inscription serves as a clear indication that the meter is part of the government-funded programme and should not attract any direct charges.
The introduction of multiple metering initiatives by NERC stems from observations that electricity distribution companies were facing difficulties in securing the necessary financing for widespread meter deployment. Recognizing this challenge, the commission has been proactive in developing programmes like DISREP to bridge the significant metering gap in Nigeria. The country currently has an estimated 5.9 million customers who are unmetered.
Refunds for Previously Paid Meters
A crucial aspect of the clarification also addresses consumers who may have previously paid upfront for meters under approved arrangements. According to NERC, these individuals are entitled to refunds. This contrasts with those who will receive meters under the current free initiatives, who are not expected to make any direct payments.
The recent clarification by NERC comes in the wake of a strong directive from the Minister of Power, Adebayo Adelabu, who explicitly banned electricity distribution companies and their installers from collecting any payments for meters. The Minister’s statement, made during an inspection of newly imported smart meters, underscored that these meters, procured under the World Bank-funded Distribution Sector Recovery Programme, must be installed free of charge for all consumers, irrespective of their tariff band.
“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,” the Minister declared. “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.”
Addressing Industry Concerns and Cost Recovery
Despite the clear directive, some electricity distribution companies have expressed concerns regarding the financial implications of the free meter policy. While acknowledging that customers won’t pay cash upfront, operators have pointed out that the cost of these meters will ultimately be borne by the DisCos over time, raising questions about cost recovery, installation expenses, and the overall financial sustainability of the initiative. Some industry insiders have privately described the policy as politically motivated and lacking sufficient consultation with stakeholders, including installers and manufacturers.
However, the Bureau of Public Enterprises (BPE) has weighed in to clarify the long-term cost recovery model. The Director-General of the BPE, Ayo Gbeleyi, explained that all investments made by DisCos, including the cost of meters, are recouped through the electricity tariff structure.
“We’ve had pushback where some have said, ‘No, the DisCos are paying for the meters over 10 years,” Gbeleyi stated. “The truth is, every component of investment that goes into the DisCos gets recouped through the tariff structure. So, whether it is a feeder pillar, whether it is a transformer, or whether it is a meter, we as consumers will ultimately pay for those pieces of equipment through the tariff design.”
This explanation reinforces the understanding that while consumers are not expected to make direct payments for meters, the cost is integrated into the overall price of electricity. President Bola Tinubu’s commitment to closing the nation’s meter gap, mentioned during his campaign, is now being realized through initiatives like DISREP, with further procurement processes underway for a presidential metering initiative. NERC’s comprehensive clarification aims to demystify the metering process and ensure a smoother rollout for all electricity consumers in Nigeria.
