NERC Approves Compensation for Band A Customers Over Poor Electricity Supply

The Nigerian Electricity Regulatory Commission (NERC) has approved a special compensation package for eligible Band A electricity customers who experienced poor power supply due to generation constraints on the national grid between February and March 2026.

The commission announced the decision in a public notice released on Thursday, stating that the measure was introduced following significant power generation shortfalls across the Nigerian Electricity Supply Industry (NESI), which prevented electricity distribution companies (DisCos) from meeting the minimum service levels promised to some Band A customers.

According to NERC, the compensation framework is contained in Directive No. NERC/2026/002, titled Special Compensation of Band A Customers Arising from Grid Generation Constraints.

The commission explained that the directive became necessary because widespread generation challenges during the period affected the ability of DisCos to deliver the expected level of electricity supply to customers classified under Band A.

NERC attributed the supply disruptions mainly to inadequate gas supply to power plants and the vandalism of critical gas and transmission infrastructure. It noted that these factors were beyond the direct operational control of electricity distribution companies.

Under the directive, customers connected to Band A feeders that recorded an average daily supply of between 18 and 20 hours during the affected period will continue to receive compensation under the existing framework established by Addendum No. NERC/2024/003.

However, the regulator has also introduced a special compensation arrangement for Band A customers whose feeders received less than 18 hours of electricity supply daily between February and March 2026.

The commission clarified that affected Band A feeders will not be downgraded during the compensation period. Instead, eligible customers will receive compensation based on their category.

For non-maximum demand customers, compensation will be equivalent to 20 percent of the approved February 2026 energy cap applicable to the affected feeder. Maximum demand customers will receive compensation equivalent to 20 percent of the average energy billed per customer in February 2026.

NERC stated that prepaid customers will receive compensation through electricity token credits, while postpaid customers will benefit through adjustments to their bills.

The commission directed all electricity distribution companies to complete compensation for February 2026 by May 31, 2026, while compensation for March 2026 must be fully implemented by June 30, 2026.

To safeguard consumer interests, NERC prohibited DisCos from using compensation credits to offset existing customer debts. It also mandated electricity companies to clearly communicate the value and period of compensation to beneficiaries.

Reaffirming its commitment to consumer protection and a stable electricity market, the regulator said it would closely monitor implementation and ensure strict compliance by distribution companies.

Industry data released by NERC showed that electricity distribution companies generated about ₦600 billion in revenue from consumers during the first quarter of 2026 despite ongoing challenges in the sector.

Data from the Nigerian Independent System Operator revealed the extent of the generation crisis, indicating that thermal power plants require about 1,629.75 million standard cubic feet of gas daily to operate at full capacity. However, as of February 23, 2026, actual gas supply stood at approximately 692 million standard cubic feet per day, representing less than 43 percent of the required volume.

The gas shortage forced several power plants to shut down or reduce output, while the Transmission Company of Nigeria resorted to load shedding to distribute the limited electricity available among distribution companies.

Although DisCos repeatedly blamed power outages on inadequate gas supply, many consumers have reported noticeable improvements in electricity supply in recent weeks.