Key Takeaways
- Band A customers hit by power shortfalls in early 2026 will receive bill credits
- Gas shortages and pipeline vandalism triggered the failures, not DisCos
- DisCos face a June 30 deadline to complete all compensation payments
Nigeria’s electricity regulator has ordered distribution companies to compensate premium electricity customers, known as Band A, who did not receive the minimum supply hours they were billed for during the first quarter of 2026.
The Nigerian Electricity Regulatory Commission (NERC) issued the directive, numbered NERC/2026/002, in a public notice on Thursday in Abuja, Nigeria’s capital.
The commission said the measure was introduced following significant generation shortfalls across the Nigerian Electricity Supply Industry (NESI), which prevented electricity distribution companies (DisCos) from delivering the minimum service levels guaranteed to some Band A customers in the first quarter of the year.
Band A customers pay the highest electricity tariff in Nigeria and are entitled to a minimum of 20 hours of power supply per day in exchange. Falling short of that threshold without compensation has been a growing source of tension between consumers, DisCos, and the regulator.
NERC said the shortfalls were largely caused by inadequate gas supply and the vandalism of critical gas and transmission infrastructure, factors beyond the direct operational control of the DisCos.
“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,” the commission said.
What the compensation covers
The directive sets out two tiers of compensation based on how badly supply fell short. The breakdown is as follows:
- Band A feeders that recorded between 18 and 20 hours of average daily supply will be compensated under the existing framework established by Addendum No. NERC/2024/003
- Band A feeders that recorded less than 18 hours of daily supply will receive special compensation equivalent to 20% of the approved February 2026 energy cap for non-maximum demand customers
- Maximum demand customers on the same feeders will receive compensation equal to 20% of the average energy billed per customer in February 2026
- Prepaid customers will receive the compensation as token credits
- Postpaid customers will receive it through bill adjustments
NERC also prohibited DisCos from using compensation credits to offset outstanding customer debts, insisting that beneficiaries must receive the full value of the approved relief.
Distribution companies were also instructed to clearly communicate the amount and period covered by the compensation to affected customers.
Why the grid failed Band A customers
The supply shortfalls that triggered the directive were not isolated incidents. Band A customers pay the highest rates under Nigeria’s tariff structure and are entitled to a minimum of 20 hours of electricity per day, a threshold that DisCos have repeatedly struggled to meet.
Gas supply constraints have been a persistent problem for Nigeria’s power sector, with many thermal plants running well below capacity due to insufficient feedstock.
Vandalism of gas pipelines in the Niger Delta, which has worsened in recent years, compounded the problem during the February to March 2026 period.
According to NERC’s circular, the primary drivers of the shortfall were identified as insufficient gas feedstock for power plants and recurring acts of vandalism targeting critical gas pipelines and transmission infrastructure, which reduced the quantity of power that could be dispatched to distribution networks.
The situation left many Band A customers and other electricity users paying premium tariffs for supply that fell significantly below the guaranteed threshold.
Deadlines for compensation
Moreover, NERC directed that compensation for February 2026 must be completed no later than May 31, 2026, while compensation for March 2026 must be implemented on or before June 30, 2026. The commission said it would continue to monitor implementation and verify compliance by all distribution companies.
NERC reaffirmed its commitment to consumer protection and market stability, stating that it would ensure all eligible customers receive the compensation due to them.
No figure has been given for the total value of credits that DisCos will be required to issue.
