Nigeria’s electricity regulator, the Nigerian Electricity Regulatory Commission (NERC), has approved a special compensation package for eligible Band A electricity consumers affected by poor power supply caused by 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 measure was designed to cushion the impact of widespread generation shortfalls that prevented electricity distribution companies (DisCos) from meeting the minimum power supply commitments promised to some Band A customers during the first quarter of the year.
According to NERC, the compensation framework was established through Directive No. NERC/2026/002 on the Special Compensation of Band A Customers Arising from Grid Generation Constraints.
The regulator explained that the power supply disruptions stemmed largely from factors beyond the direct control of the distribution companies, particularly inadequate gas supply to thermal power plants and the vandalism of critical gas and transmission infrastructure.
“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 stated.
Under the directive, customers connected to Band A feeders that maintained an average daily electricity supply of between 18 and 20 hours during the affected period will continue to receive compensation under the existing framework established in Addendum No. NERC/2024/003.
However, NERC introduced additional relief measures for Band A customers connected to feeders that received less than 18 hours of daily electricity supply between February and March 2026.
The commission clarified that affected Band A feeders would not be downgraded during the compensation period and that eligible consumers would receive credits based on their customer category.
For non-maximum demand customers, compensation will amount to 20 per cent of the approved February 2026 energy cap applicable to the affected feeder. Maximum demand customers, on the other hand, will receive compensation equivalent to 20 per cent of the average energy billed per customer in February 2026.
NERC further explained that prepaid customers would receive the compensation through electricity token credits, while postpaid customers would benefit through adjustments to their electricity bills.
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To ensure timely implementation, the commission directed distribution companies to complete compensation for February 2026 by May 31, 2026, while compensation relating to March 2026 must be finalised no later than June 30, 2026.
The regulator also introduced safeguards aimed at protecting consumers, warning that DisCos must not use the compensation credits to offset existing customer debts. It added that customers must be clearly informed about the value and period covered by any compensation received.
Reaffirming its commitment to consumer protection and market stability, NERC said it would continue monitoring implementation and verifying compliance across the industry to ensure all eligible customers receive the compensation due to them.
The compensation directive comes amid persistent challenges in Nigeria’s power sector. Industry data showed that electricity distribution companies generated about N600 billion in revenue from consumers during the first quarter of 2026 despite recurring supply disruptions.
Operational data from the Nigerian Independent System Operator highlighted the severity of the generation crisis. The agency reported that thermal power plants require approximately 1,629.75 million standard cubic feet of gas per day to operate optimally, but actual supply as of February 23, 2026, stood at only 692 million standard cubic feet per day—less than 43 per cent of required demand.
The gas shortage forced several power plants to shut down operations, while the Transmission Company of Nigeria implemented load-shedding measures to distribute limited electricity across the country. Throughout the period, distribution companies repeatedly attributed widespread outages to insufficient gas supply.
Despite the challenges experienced earlier in the year, some electricity consumers have reported noticeable improvements in power supply in recent weeks.