The Nigerian Electricity Regulatory Commission (NERC) has approved a special compensation package for eligible Band A electricity customers affected by generation shortfalls that disrupted power supply between February and March 2026.
The commission announced this in a statement on Wednesday, saying the compensation framework was introduced through Directive No. NERC/2026/002 on the Special Compensation of Band A Customers Arising from Grid Generation Constraints.
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“The Nigerian Electricity Regulatory Commission (NERC) hereby notifies electricity consumers and stakeholders of the issuance of Directive No. NERC/2026/002 on the Special Compensation of Band A Customers Arising from Grid Generation Constraints,” the commission stated in a public notice posted on its official X page on Thursday.
According to the regulator, the intervention became necessary following significant generation shortfalls across the Nigerian Electricity Supply Industry (NESI), which hindered Distribution Companies (DisCos) from meeting the committed supply levels promised to some Band A customers.
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In recent weeks and months, many Nigerians across major cities and communities have been grappling with poor power supply.
The poor supply of electricity has made many homes and businesses to opt for expensive solar systems and generating sets as alternatives to keep their homes and businesses running.
However, the spike in the cost of fuel in recent months has also exacerbated the power supply challenges across the country.
NERC attributed the lingering disruptions mainly to inadequate gas supply and vandalism of critical gas and transmission infrastructure, noting that the factors were beyond the direct operational control of electricity distribution companies.
Last month, data posted by the commission indicated that Nigeria’s grid-connected power plants operated at just 31 per cent of their installed capacity in April 2026, with average available generation standing at 4,286 megawatts (MW) out of a total installed capacity of 13,625MW.
The report also showed that while available generation improved slightly by 5 per cent compared to March, persistent voltage and frequency instability continued to undermine grid reliability, with both parameters exceeding prescribed operational limits during the month.
NERC also disclosed that the 28 grid-connected plants captured in the report recorded an average hourly generation of 4,048 megawatt-hours per hour (MWh/h), representing a load factor of 94 per cent.
The April data reinforce the longstanding structural challenge in Nigeria’s electricity sector, where installed generation capacity remains significantly higher than the available and dispatchable power.
Despite investments in generation infrastructure over the years, low plant availability, gas supply constraints, maintenance challenges, transmission bottlenecks and weak grid stability continue to limit effective electricity delivery across Nigeria.
Compensation framework
Under the new directive, NERC said the compensation arrangement covers the period from February to March 2026.
For Band A feeders that recorded an average daily supply of between 18 and 20 hours, the commission said the existing compensation framework under Addendum No. NERC/2024/003 would continue to apply to both Maximum Demand (MD) and Non-Maximum Demand (Non-MD) customers.
However, for Band A feeders that received less than 18 hours of daily supply during the period, NERC approved a special compensation mechanism while maintaining their Band A classification.
For eligible Non-MD customers, compensation will amount to 20 per cent of the approved February 2026 energy cap applicable to the affected feeder.
Similarly, MD customers will receive compensation equivalent to 20 per cent of the average energy billed per MD customer in February 2026.
Mode of compensation
The commission said prepaid customers would receive compensation through token credits, while postpaid customers would be compensated through bill adjustments.
It added that compensation for customers affected in February 2026 must be completed no later than 31 May 2026, while payments relating to March 2026 shortfalls must be concluded by 30 June 2026.
NERC directed electricity distribution companies not to offset compensation credits against existing customer debts.
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The regulator also mandated DisCos to clearly communicate the value and compensation period to affected customers.
“NERC remains committed to protecting electricity consumers while ensuring the stability and sustainability of the electricity market,” the commission said.
The commission added that it would continue monitoring implementation and verifying compliance to ensure that all eligible customers receive the compensation due to them.
The directive comes amid growing concerns over electricity supply reliability despite the introduction of the Band A tariff framework, which guarantees customers receiving at least 20 hours of daily electricity supply premium pricing arrangements.
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