The Nigerian Electricity Regulatory Commission (NERC) has approved a special compensation package for eligible Band A electricity customers affected by power supply disruptions caused by generation constraints across the country’s power sector between February and March 2026.
The regulatory commission announced the decision through Directive No. NERC/2026/002 on the Special Compensation of Band A Customers Arising from Grid Generation Constraints, describing the measure as part of efforts to protect consumers while maintaining stability in the Nigerian Electricity Supply Industry (NESI).
According to NERC, the intervention became necessary following significant generation shortfalls recorded during the two-month period, which hindered the ability of electricity Distribution Companies (DisCos) to deliver the minimum service levels promised to some Band A customers.
The commission explained that the disruptions were largely driven by inadequate gas supply and acts of vandalism targeting critical gas and transmission infrastructure, circumstances that were beyond the direct operational control of the affected DisCos.
Under the directive, the compensation framework covers the period between February and March 2026. NERC stated that Band A feeders that maintained an average daily electricity supply of between 18 and 20 hours during the period would continue to be compensated under the existing provisions contained in Addendum No. NERC/2024/003, applicable to both Maximum Demand (MD) and Non-Maximum Demand (Non-MD) customers.
For Band A feeders that recorded less than 18 hours of daily electricity supply, the commission introduced a special compensation arrangement while exempting the affected feeders from any downgrade during the covered period.
Under the new arrangement, eligible Non-MD customers will receive compensation equivalent to 20 per cent of the approved February 2026 energy cap applicable to their feeders. Maximum Demand customers, on the other hand, will receive compensation equivalent to 20 per cent of the average energy billed per MD customer in February 2026.
NERC further directed that prepaid customers must receive their compensation through electricity token credits, while postpaid customers will be compensated through adjustments to their bills.
The commission also outlined strict timelines for implementation. Compensation relating to February 2026 supply shortfalls was scheduled to be completed by May 31, 2026, while compensation for March 2026 is expected to be fully implemented no later than June 30, 2026.
In a move aimed at protecting consumers, NERC prohibited Distribution Companies from using compensation credits to offset outstanding customer debts. The regulator also directed electricity providers to clearly communicate the value and period of compensation awarded to every eligible customer.
The commission reaffirmed its commitment to consumer protection and transparency within the power sector, stressing that it would closely monitor implementation across the industry to ensure full compliance with the directive.
“NERC remains committed to protecting electricity consumers while ensuring the stability and sustainability of the electricity market,” the commission stated.
The regulator added that it would continue to verify compliance by Distribution Companies to ensure that all eligible customers receive the compensation due to them.
The directive comes amid ongoing efforts by stakeholders to improve electricity supply reliability and address challenges facing Nigeria’s power sector, particularly recurring generation constraints linked to gas shortages and infrastructure vandalism. Industry observers say the compensation scheme is expected to provide some relief to customers who paid premium tariffs under the Band A service classification but received electricity supply below the expected threshold during the affected period.
