He made this known during the screening of ministerial nominees submitted to the Senate by President Bola Tinubu.
According to El-Rufai, the electricity supply situation in Nigeria has defied every government for 60 years.
"Metering is a big issue, a lot of progress has been made by some of the Distribution Companies (Discos). In the last three or four years with the support of the CBN and the World Bank, every household should have been metered, every business should be metered.
"Estimated billings is not acceptable. But in addition, Nigeria must take a hard stance against those that steal electricity. Those that get electricity by diverting cables; not paying, we must take a hardline stance against it if this sector is to work.
"A lot of advocacy is necessary. People believe that water and electricity should be free, the social services, but they are not; they cost money to produce.
"The least you can do is pay back for the cost of production and handing it to the private sector, they need some return on its investment over and above the cost of production."
The nominee also raised the issue of distribution saying that in 2013 Discos were privatised.
"We privatised our distribution companies, 11 of them; 60% to the private sector, 40% to be owned by government.
"The idea is that the 40% is supposed to be listed on the foreign exchange so that every Nigerian will be a shareholder in it.
"But that has not happened, 10 years after privatisation, the government is still subsidising electricity in one way or the other.
"The last time we checked it was about ₦1.6 trillion in the privatised environment. This is unsustainable and unacceptable."
He, however, said that President Tinubu was committed to ensure Nigeria has stable and reliable electricity supply.
"This is because without electricity, industrialisation is a pipe dream. Without electricity, even agriculture today is not a viable proposition.
"So he is committed to that and he has asked me to work with him to address these problems. So I will do my best to address them."
Senator Sunday Karimi while commenting on the nominee said, "Your performance in any office you served has been outstanding. Your record is there. In FCT as a minister your record is there and as two term governor of Kaduna State.
"I have a very strong petition against you that bothers on security, unity and coerciveness on the nation and I think that petition has to be considered along this screening exercise."
Reacting, Senator Sani Musa said the nominee has credibility when it came to performance on every assignment he had undertaken for this country.
"And he is not different from any other one that have performed in other places. There had been two former governors that had been here and there was a precedence and that precedence as a convention in chambers like this should be sustained.
"And such, I want to propose that El-Rufai too should take his bow."
While trying to respond to the petition, El-Rufai said, "The distinguished senator from Kogi who talked about a petition against me..."
The President of the Senate, Godswill Akpabio, immediately interjected saying, "Perhaps I should inform that I have received petitions from many other people in respect of other nominees but this is not where we are to deal with petitions.
"Our job here is to screen and then of course we can refer petition to where petitions will be dealt with.
"These are the nominees of Mr President. If it is something that is a formal petition before the Senate, we will look at it formally. But there are certain petitions we have to refer back to either the Presidency or security agencies to look at and that has nothing to do with us.
"I think at the time we are going into the issue of confirmation and approval, we will be so advised. So I will want to plead with my brother to take a bow."