NERC Orders Compensation for Band A Consumers

The (NERC) Nigerian Electricity Regulatory Commission has unveiled a targeted relief initiative for qualifying Band A electricity consumers who suffered reduced power availability as a result of nationwide generation challenges recorded between February and March 2026.

The regulatory body disclosed the decision through a public announcement published on its social media platforms, explaining that widespread generation deficiencies within the Nigerian Electricity Supply Industry (NESI) significantly affected the ability of electricity distribution companies (DisCos) to provide the level of service promised to customers within the premium Band A category.

To address the situation, NERC introduced Directive No. NERC/2026/002, a policy designed to provide compensation to affected consumers. The commission noted that the disruptions were primarily linked to circumstances beyond the control of distribution companies, particularly inadequate gas supplies to power stations and repeated attacks on critical gas and transmission facilities. These challenges severely constrained electricity generation nationwide, leading to prolonged supply shortages across several distribution networks.

According to the regulator, the compensation arrangement applies specifically to the February–March 2026 period. Customers supplied through Band A feeders that maintained an average of 18 to 20 hours of electricity daily during the affected months will continue to receive compensation under the framework already established by Addendum No. NERC/2024/003. This provision covers both Maximum Demand (MD) customers and Non-Maximum Demand consumers.

In addition, NERC approved an exceptional compensation package for Band A customers connected to feeders that delivered less than 18 hours of electricity daily. Despite the reduced service levels, the commission clarified that such feeders would retain their Band A classification throughout the compensation period and would not be downgraded.

The compensation structure varies according to customer classification. Non-Maximum Demand customers will receive credits equivalent to 20 percent of the approved February 2026 energy cap assigned to the affected feeder. For Maximum Demand customers, compensation will amount to 20 percent of the average energy charge billed per MD customer during the same month.

To ensure smooth implementation, NERC directed that prepaid customers should receive compensation through energy token credits, while postpaid customers should benefit through corresponding reductions in their bills. Distribution companies have also been instructed to complete all February-related compensation by May 31, 2026, while compensation for March must be fully executed by June 30, 2026.

The commission further introduced consumer-protection measures aimed at guaranteeing transparency and fairness. DisCos are expressly forbidden from using compensation credits to settle existing customer debts. They are also required to clearly communicate the amount of compensation granted and the specific period for which it applies.

Reaffirming its commitment to consumer welfare and the long-term sustainability of the electricity market, NERC stated that it will actively supervise implementation of the directive and verify compliance across all distribution companies to ensure eligible customers receive the benefits due to them.

The development comes amid revelations that electricity distribution companies generated approximately N600 billion in revenue from consumers during the first quarter of 2026, despite ongoing operational challenges in the sector.

Data released by the Nigerian Independent System Operator highlighted the severity of the generation deficit. Thermal power plants require roughly 1.63 billion standard cubic feet of gas daily to achieve optimal performance. However, by February 23, 2026, available gas supply stood at only about 692 million standard cubic feet per day, representing less than half of operational requirements. The shortfall forced several generation plants offline and compelled the Transmission Company of Nigeria to ration available electricity through controlled load management.

Although distribution companies consistently attributed service disruptions to inadequate gas supplies, recent reports from consumers across various parts of the country indicate a gradual improvement in electricity availability over the past few weeks.