The Nigerian Electricity Regulatory Commission (NERC) has approved a special compensation package for eligible Band A electricity consumers affected by power supply disruptions caused by generation constraints across the country between February and March 2026.
The regulatory directive, announced in a public notice issued on Thursday, follows widespread electricity supply shortfalls within the Nigerian Electricity Supply Industry (NESI), which prevented several Distribution Companies (DisCos) from meeting the minimum service commitments required for Band A customers.
Band A customers are expected to receive a minimum of 20 hours of electricity supply daily under the current service-based tariff framework. However, NERC noted that significant generation shortages during the review period made it difficult for some feeders to achieve the prescribed supply levels.
According to the commission, the disruptions were primarily triggered by inadequate gas supply to power generation companies and repeated vandalism of critical gas pipelines and transmission infrastructure. NERC emphasized that these factors were beyond the direct control of the affected DisCos.
To cushion the impact on consumers, the commission approved a compensation mechanism covering the two-month period.
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Under the arrangement, Band A feeders that maintained an average daily electricity supply of between 18 and 20 hours will continue to receive compensation under the existing provisions outlined in Addendum No. NERC/2024/003. The compensation framework applies to both Maximum Demand (MD) and Non-Maximum Demand (Non-MD) customers.
For Band A feeders that recorded less than 18 hours of daily supply, NERC directed that such feeders should not be downgraded during the affected period. Instead, eligible customers will receive financial compensation based on their billing category.
The commission explained that Non-MD customers connected to the affected feeders will receive compensation equivalent to 20 per cent of the approved February 2026 energy cap applicable to their respective feeders.
Meanwhile, MD customers will be compensated with an amount equivalent to 20 per cent of the average energy billed per MD customer in February 2026.
NERC further stated that prepaid customers would receive the compensation through energy token credits, while postpaid customers would benefit through direct adjustments to their electricity bills.
To ensure timely implementation, the commission directed all DisCos to complete compensation payments for February 2026 supply shortfalls by May 31, 2026, while compensation for March 2026 disruptions must be fully effected no later than June 30, 2026.
In addition, NERC prohibited electricity distribution companies from applying compensation credits to offset existing customer debts. Instead, consumers must receive the full value of the compensation independently of any outstanding obligations.
The commission also instructed DisCos to provide clear information to customers regarding the amount of compensation granted and the specific period it covers, as part of efforts to promote transparency and accountability.
Industry analysts say the decision reflects NERC’s growing focus on consumer protection while balancing the operational realities confronting Nigeria’s power sector.
They noted that although the supply disruptions stemmed largely from systemic challenges such as gas shortages and infrastructure vandalism, the compensation package is expected to strengthen confidence in the service-based tariff regime by ensuring customers receive some form of redress when promised service levels are not achieved.
Energy experts, however, stressed that long-term improvements in electricity reliability will depend on addressing recurring gas supply constraints, strengthening transmission infrastructure, and enhancing security around critical energy assets.
NERC reaffirmed its commitment to safeguarding electricity consumers while maintaining the stability and sustainability of the power market. The commission said it would continue to closely monitor implementation of the directive and verify compliance by DisCos to ensure that all eligible customers receive the compensation due to them.