NERC gives special compensation to Band A customers hit by power issues

The Nigerian Electricity Regulatory Commission (NERC) has approved a special compensation plan for eligible Band A electricity customers affected by power shortages 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, this action was needed because of serious generation shortfalls in the Nigerian Electricity Supply Industry (NESI). These shortfalls made it hard for Distribution Companies (DisCos) to provide the electricity they promised to some Band A customers.

In recent weeks, many Nigerians in big cities and towns have been facing poor power supply. This has forced many homes and businesses to turn to costly solar systems and generators to keep things running.

The rise in fuel prices lately has made the electricity situation even worse. NERC said the ongoing power disruptions are mainly due to a lack of gas supply and damage to important gas and transmission facilities. They noted these issues are beyond the direct control of electricity distribution companies.

Last month, NERC reported that Nigeria’s power plants connected to the grid operated at only 31 percent of their full capacity in April 2026. The average available generation was 4,286 megawatts (MW) out of a total capacity of 13,625 MW.

The report also showed that while available generation rose by 5 percent compared to March, ongoing voltage and frequency problems continued to hurt grid reliability. Both these issues went over the acceptable limits during the month.

NERC also revealed that the 28 grid-connected plants in the report produced an average of 4,048 megawatt-hours per hour (MWh/h), showing a load factor of 94 percent.

The April data highlight the long-standing problems in Nigeria’s power sector. The installed generation capacity is much higher than the available and usable power. Despite investments in power generation over the years, issues like low plant availability, gas supply problems, maintenance issues, transmission delays, and weak grid stability still limit effective electricity supply across Nigeria.

Compensation Plan

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.

For Band A feeders that had less than 18 hours of daily supply during the period, NERC approved a special compensation method but kept 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. MD customers will receive compensation equal to 20 percent of the average energy billed per MD customer in February 2026.

How Compensation Works

The commission said prepaid customers will get compensation through token credits, while postpaid customers will see adjustments on their bills. They added that compensation for customers affected in February 2026 must be completed by 31 May 2026, while payments for March 2026 shortfalls must be done by 30 June 2026.

NERC told electricity distribution companies not to take compensation credits out of existing customer debts. The regulator also instructed DisCos to clearly inform affected customers about the compensation value and period.

“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 make sure all eligible customers receive their compensation.