Band A electricity customers to receive compensation for poor power supply, says NERC

• NERC will compensate eligible Band A customers who received less than the minimum required electricity supply between February and March 2026.

• The regulator blamed the power shortfall on inadequate gas supply and vandalism of critical gas and transmission infrastructure.

• Prepaid customers will receive token credits, while postpaid customers will get bill adjustments, with DisCos required to complete compensation by the end of June 2026.

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 challenges on the national grid between February and March 2026.

In a public notice released on Thursday, the regulator said the decision followed widespread generation shortfalls that affected electricity distribution companies' ability to deliver the minimum hours of supply promised to Band A customers during the first quarter of the year.

According to NERC, it has issued Directive No. NERC/2026/002 on the Special Compensation of Band A Customers Arising from Grid Generation Constraints to address the disruptions.

The commission explained that the directive was introduced "in recognition of the significant generation shortfalls experienced across the Nigerian Electricity Supply Industry between February and March 2026, which affected the ability of distribution companies to meet the committed service levels for some Band A customers."

NERC noted that the outages were largely caused by factors outside the control of electricity distribution companies (DisCos).

"The shortfalls were largely attributed to inadequate gas supply and vandalism of critical gas and transmission infrastructure, factors beyond the direct operational control of the DisCos," the commission stated.

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Band A customers are expected to receive at least 20 hours of electricity supply daily under Nigeria's electricity tariff structure. However, many consumers in the category complained of prolonged outages during the period under review despite paying higher tariffs.

Under the new directive, customers connected to Band A feeders that recorded an average daily supply of between 18 and 20 hours will continue to receive compensation under the existing framework.

NERC stated: "Where a Band A feeder recorded an average daily supply of between 18 and 20 hours, the existing compensation framework under Addendum No. NERC/2024/003 shall apply to both Maximum Demand and Non-Maximum Demand customers."

The commission also introduced additional compensation measures for customers connected to Band A feeders that received less than 18 hours of electricity supply daily between February and March 2026.

It clarified that affected feeders will not be downgraded during the compensation period and that eligible customers will be compensated according to their billing category.

For non-maximum demand customers, the regulator said they would receive "compensation equivalent to 20 per cent of the approved February 2026 energy cap applicable to the affected feeder."

Meanwhile, maximum demand customers will receive compensation equal to 20 per cent of the average energy billed per MD customer in February 2026.

NERC explained that prepaid customers will receive their compensation through electricity token credits, while postpaid customers will receive bill adjustments.

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 protect consumers, NERC said distribution companies are not allowed to deduct the compensation from any outstanding debt owed by customers.

"Distribution companies are prohibited from offsetting compensation credits against any existing customer debt," the regulator said, adding that "customers must be clearly informed of the value and period of compensation received."

The latest directive comes amid ongoing challenges in Nigeria's power sector, particularly gas shortages affecting thermal power plants, which generate the majority of the country's electricity.

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Industry data from the Nigerian Independent System Operator showed that thermal plants require about 1,629.75 million standard cubic feet of gas daily to operate efficiently. However, as of February 23, 2026, actual gas supply stood at approximately 692 million standard cubic feet per day, less than 43 per cent of what was required.

The shortfall forced several power plants to reduce output or shut down entirely, while the Transmission Company of Nigeria resorted to load shedding to distribute the limited electricity available across the country.

Despite the supply challenges, electricity distribution companies reportedly generated nearly N600 billion in revenue from consumers during the first quarter of 2026, according to industry figures released by NERC.

In recent weeks, however, some electricity consumers across the country have reported improvements in power supply as generation levels gradually recover.

NERC said it will continue to monitor compliance with the directive to ensure that all eligible Band A customers receive the compensation due to them.