The Nigerian Electricity Regulatory Commission (NERC) has approved a special compensation package for eligible Band A electricity customers affected by poor power supply resulting from generation constraints on the national grid between February and March 2026.
The commission announced the decision in a public notice issued on Thursday, stating that the directive was introduced following significant generation shortfalls across the Nigerian Electricity Supply Industry during the first quarter of the year.
According to NERC, the supply challenges prevented some electricity distribution companies from meeting the minimum service levels guaranteed to Band A customers under the current tariff structure.
To address the situation, the regulator issued Directive No. NERC/2026/002 on the Special Compensation of Band A Customers Arising from Grid Generation Constraints.
The commission explained that the measure was necessary due to widespread disruptions that affected electricity supply across several distribution networks.
“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,” the directive stated.
NERC noted that the supply disruptions were largely beyond the control of electricity distribution companies.
“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 said.
Under the directive, the compensation programme covers the period from February 2026 to March 2026.
The regulator 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 framework.
“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 explained.
However, NERC introduced an additional compensation arrangement for Band A customers connected to feeders that received less than 18 hours of electricity supply daily during the affected period.
According to the directive, affected Band A feeders will not be downgraded during the compensation period despite failing to meet the required service threshold.
The commission stated that eligible customers would receive compensation based on their customer classification.
For non-maximum demand customers, compensation will be equivalent to 20 per cent of the approved February 2026 energy cap applicable to the affected feeder.
Similarly, maximum demand customers will receive compensation equivalent to 20 per cent of the average energy billed per MD customer in February 2026.
NERC also outlined how the compensation would be delivered to consumers.
Prepaid customers will receive compensation through electricity token credits, while postpaid customers will benefit through adjustments to their monthly electricity bills.
To ensure timely implementation, the commission directed all distribution companies to complete compensation for February 2026 no later than May 31, 2026.
Compensation relating to March 2026 must be concluded by June 30, 2026.
The regulator further introduced safeguards aimed at protecting consumers and ensuring transparency throughout the process.
NERC prohibited electricity distribution companies from using compensation credits to offset outstanding customer debts.
“Distribution companies are prohibited from offsetting compensation credits against any existing customer debt,” the commission stated.
It also directed DisCos to clearly communicate the value and period of compensation to all eligible customers.
Reaffirming its commitment to consumer protection and market stability, NERC said it would closely monitor implementation and verify compliance across all distribution companies.
The commission added that it remains committed to protecting electricity consumers while ensuring the long-term sustainability of the power sector.
The directive comes amid ongoing challenges in Nigeria’s electricity industry despite significant revenue collections by distribution companies.
Industry data released by NERC showed that DisCos collected approximately N600bn from electricity consumers during the first quarter of 2026.
Operational data from the Nigerian Independent System Operator highlighted the severity of the generation crisis during the period.
According to the system operator, thermal power plants require approximately 1,629.75 million standard cubic feet of gas per day to operate at optimal capacity.
However, as of February 23, 2026, actual gas supply stood at about 692 million standard cubic feet per day, representing less than 43 per cent of the required volume.
The shortfall forced several power plants to shut down operations, while the Transmission Company of Nigeria implemented load shedding measures to distribute the limited available electricity among distribution companies.
Throughout the first quarter, several DisCos repeatedly informed customers that persistent outages were linked to inadequate gas supply and constraints within the national grid.
Despite these challenges, some consumers have reported noticeable improvements in electricity supply in recent weeks, suggesting a gradual recovery in generation and distribution levels.
