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Plan out the project and have a qualified professional take a look at the wiring. Make sure no electrical work is needed before building the electrical closet, and check with the electrician to make sure the planned changes don't violate electrical codes. If any wiring or outlets need to be moved for this project, leave the job to a pro. Turn off the electrical power to the home and use a volt meter to make sure the power is off. Use a pry bar and hammer to pull away any trim, then remove the excess paneling, wall board and ceiling material. Set the paneling and ceiling tiles aside.
Measure out 4" from the front of the electrical box and install a 2x4 stud in the existing wall. The stud should fit snugly from the floor joist to the ceiling joist. Make sure the stud is plumb and drive long screws at an angle through the stud and into the joists to secure. The new electrical closet will only extend out to this stud -- a big improvement over the old closet's huge footprint. Use a hammer drill and masonry screws to attach a pressure-treated 2x4 to the concrete floor. Make sure the 2x4 lines up with the new stud; it will be the base plate for the new door frame.
Measure the pre-hung door and build a three-sided door frame from 2x4s. The top of the frame should be the same size and the base plate. Rest the new door frame on the base plate, make sure it's plumb and secure it to the new wall stud with screws. Also use screws to secure the bottom of the frame to the base plate. Tip: It's especially important to make sure pieces are plumb, square and level when building any type of framing, especially a door frame. Mis-aligned framing isn't as stable, and out-of-plumb doors don't open and close properly.
Use a circular saw to cut sheets of oriented strandboard (OSB) to fit over the exposed wiring. Use a jigsaw to cut a hole for the electrical meter. Fit the OSB panels in place and secure with screws. Prime and paint as desired. Sand and paint the fuse box covers and reinstall. Safety Alert: Make sure to follow the electrician's instructions on whether wiring and other equipment can be covered with OSB. Remember, it's important to have easy access to fuse and breaker boxes.
Use nails to reattach paneling as needed, trimming to fit the new wall profile. If drywall was removed, replace it with new drywall. Attach the drywall with screws, then apply drywall compound and drywall tape to the joints. Let dry and sand before painting. Replace ceiling tiles as needed. Position the pre-hung door in the frame and adjust for plumb and level. Slip wood shims into the gaps between the door and frame to bring it into alignment; add shims to fill gaps once the door is plumb and level. Use nails to attach the door to the frame, driving nails through shims to secure them. Install the door knob.
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