NERC Orders Electricity Distributors to Compensate Premium Customers for Power Shortfalls

Nigeria’s electricity regulator has ordered distribution companies to compensate Band A customers who were shortchanged on power supply earlier this year, as the regulator moves to enforce accountability for a grid crisis it says was driven by gas shortages and the vandalism of critical infrastructure.

The Nigerian Electricity Regulatory Commission (NERC) issued Directive No. NERC/2026/002 on Thursday, covering supply failures that occurred between February and March 2026 across the Nigerian Electricity Supply Industry (NESI). Band A customers are the country’s highest-paying electricity consumers, billed at premium rates in exchange for a guaranteed minimum of 20 hours of daily supply.

“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 said in a public notice.

The regulator attributed the shortfalls to forces outside the direct control of distribution companies. “The shortfalls were largely attributed to inadequate gas supply and vandalism of critical gas and transmission infrastructure,” NERC stated.

Tiered Compensation Framework

The directive sets different compensation thresholds depending on how severely a feeder was affected. Feeders that managed to deliver between 18 and 20 hours of daily supply will fall under the existing compensation framework established by Addendum No. NERC/2024/003, applicable to both Maximum Demand (MD) and Non-Maximum Demand (Non-MD) customers.

For feeders that fell below the 18-hour threshold — the more severely affected group — NERC prescribed a separate special compensation scheme. Under that scheme, Non-MD customers are entitled to credits equivalent to 20% of the approved February 2026 energy cap for the affected feeder, while MD customers are to receive compensation equivalent to 20% of the average energy billed per MD customer in February 2026. Critically, no feeder that qualifies under the special scheme will be downgraded in service classification during the covered period.

How Customers Will Be Paid

The mechanism for delivering compensation differs by meter type. Prepaid customers will receive their credits through token top-ups, while postpaid customers will see adjustments reflected directly on their electricity bills.

NERC has set firm deadlines for compliance: compensation covering February 2026 must be processed no later than May 31, 2026, while credits for March 2026 must be completed by June 30, 2026.

The directive also includes explicit consumer protections. Distribution companies are barred from using compensation credits to offset outstanding customer debts, and they are required to clearly inform affected customers of both the value and the period covered by any compensation they receive.

Regulator Signals Continued Oversight

NERC said it would actively monitor DisCo compliance and verify that all eligible customers receive what they are owed. “The Commission remains committed to protecting electricity consumers while ensuring the stability and sustainability of the electricity market,” the statement read.

Customers seeking further details have been directed to the NERC website at nerc.gov.ng.

The directive comes amid broader frustration among Nigerian households and businesses over persistent power supply failures, even among Band A feeders that command significantly higher tariffs since a controversial tariff hike took effect in 2024. For many subscribers who pay premium rates expecting near-round-the-clock electricity, the compensation order may offer limited relief — but it marks one of the regulator’s more direct interventions on behalf of consumers in recent memory.