NERC Approves Compensation for Band A Electricity Customers Affected by Power Shortfalls

The Nigerian Electricity Regulatory Commission (Nigerian Electricity Regulatory Commission) has approved a special compensation package for Band A electricity customers who experienced reduced power supply in February and March 2026.

The decision follows a period of industry-wide shortfalls that prevented Distribution Companies (DisCos) from meeting the minimum service levels promised to Band A customers, who pay higher tariffs in exchange for longer daily electricity supply.

Why NERC Is Paying Compensation

According to NERC, the decline in electricity supply during the affected months was largely caused by:

• Inadequate gas supply
• Vandalism of critical gas and transmission infrastructure

These challenges, the regulator noted, were beyond the direct operational control of the DisCos but still had a measurable impact on service delivery.

At a time when electricity tariffs have risen sharply amid inflation and broader economic pressure, complaints from Nigerians intensified as power availability dropped. Many consumers argue that higher tariffs must come with consistent and reliable supply — a position NERC appears to be responding to with this intervention.

What the Compensation Means for Customers

NERC says the compensation is part of its customer-protection mandate and is aimed at preserving confidence in the electricity market while ensuring its long-term sustainability.

Key points of the directive include:

• All DisCos must comply with the compensation order
• Compensation cannot be used to offset existing customer debts
• NERC will monitor implementation and verify compliance to ensure eligible customers receive what they are owed

This is not the first compensation framework introduced by the regulator. Under an earlier directive (Addendum No. NERC/2024/003), Band A customers were already entitled to compensation if average daily supply fell below 18–20 hours.

How the Band A Compensation Will Work

Compensation Period

• February 2026
• March 2026

These were the months when supply shortfalls were recorded.

Form of Compensation

• No cash payments
• Bill credits only
  • Prepaid customers: token credits
  • Postpaid customers: bill adjustments

Who Qualifies and How Much Will Be Paid?

The special compensation applies to Band A customers who received less than 18 hours of electricity per day and covers both:

Non-Maximum Demand (Non-MD) Customers

• Compensation equals 20% of the approved February 2026 energy cap for the affected feeder

Maximum Demand (MD) Customers

• Compensation equals 20% of the average energy billed per MD customer in February 2026
• This is based on actual usage, not feeder averages

Payment Timeline

NERC has set clear deadlines:

• February 2026 compensation: to be completed no later than 31 May 2026
• March 2026 compensation: to be completed no later than 30 June 2026

Customers must also be clearly informed about:

• The value of the compensation
• The period it covers

Importantly, NERC added that affected Band A feeders will not be downgraded during the compensation period.

Why This Matters

This move reinforces a key principle in Nigeria’s power sector reforms: higher tariffs must come with accountability. While structural issues like gas supply and infrastructure vandalism remain unresolved, the compensation framework signals that consumers should not bear the full cost of service failures.

For Band A customers, the bill credits may not erase the frustration of lost power — but they represent a regulatory acknowledgment that service commitments matter and must be enforced.