The Nigerian Electricity Regulatory Commission (NERC) has approved a special compensation package for Band A electricity customers affected by power cuts caused by generation shortfalls that happened between February and March 2026.
The commission shared this news in a statement on Wednesday. They introduced the compensation plan through Directive No. NERC/2026/002 on the Special Compensation of Band A Customers Arising from Grid Generation Constraints.
"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 said in a public notice on its official X page on Thursday.
According to NERC, the intervention was needed due to significant generation shortfalls in the Nigerian Electricity Supply Industry (NESI). These shortfalls stopped Distribution Companies (DisCos) from providing the promised supply levels to some Band A customers.
In recent weeks, many Nigerians in major cities have struggled with poor power supply.
The lack of electricity has forced many homes and businesses to buy costly solar systems and generators to keep running.
But the rising fuel prices in recent months have also made the power supply problems worse across Nigeria.
NERC said the ongoing disruptions were mainly due to insufficient gas supply and damage to key gas and transmission infrastructure. They noted that these issues are beyond the direct control of electricity distribution companies.
Last month, data from the commission showed that Nigeria’s grid-connected power plants operated at only 31 percent of their installed capacity in April 2026. The average available generation was 4,286 megawatts (MW) out of a total installed capacity of 13,625 MW.
The report also revealed that available generation improved slightly by 5 percent compared to March. But voltage and frequency instability continued to hurt grid reliability, with both exceeding operational limits during the month.
NERC also reported that the 28 grid-connected plants recorded an average hourly generation of 4,048 megawatt-hours per hour (MWh/h), which represents a load factor of 94 percent.
The April data highlights the ongoing problems in Nigeria’s electricity sector. The installed generation capacity is much higher than the available and usable power.
Despite investments in generation infrastructure over the years, low plant availability, gas supply issues, maintenance problems, transmission delays, and weak grid stability continue to limit effective electricity delivery across Nigeria.
Compensation Framework
Under the new directive, NERC said the compensation plan covers the period from February to March 2026.
For Band A feeders that had an average daily supply of between 18 and 20 hours, the existing compensation plan under Addendum No. NERC/2024/003 will still apply to both Maximum Demand (MD) and Non-Maximum Demand (Non-MD) customers.
But for Band A feeders that received less than 18 hours of daily supply during this time, NERC approved a special compensation method while keeping their Band A status.
For eligible Non-MD customers, compensation will be 20 percent of the approved February 2026 energy cap for the affected feeder.
Similarly, MD customers will receive compensation equal to 20 percent of the average energy billed per MD customer in February 2026.
Mode of Compensation
The commission said that prepaid customers would get compensation through token credits, while postpaid customers would see bill adjustments.
It added that compensation for customers affected in February 2026 must be finished by 31 May 2026. Payments for March 2026 shortfalls should be done by 30 June 2026.
NERC ordered electricity distribution companies not to offset compensation credits against existing customer debts.
The regulator also told DisCos to clearly inform affected customers about the value and period of compensation.
"NERC remains committed to protecting electricity consumers while ensuring the stability and sustainability of the electricity market," the commission said.
They added that they will keep monitoring the implementation and checking compliance to ensure all eligible customers receive their compensation.
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