The Nigerian Electricity Regulatory Commission (NERC) has approved a special compensation package for eligible Band A electricity consumers who experienced inadequate power supply due to generation constraints on the national grid between February and March 2026.
The commission announced the development in a public notice released through its official social media platforms on Thursday, explaining that the decision was prompted by widespread generation challenges within the Nigerian Electricity Supply Industry (NESI) during the first quarter of 2026.
According to NERC, the generation deficiencies significantly affected the ability of electricity distribution companies (DisCos) to meet the minimum electricity supply commitments guaranteed to customers under the Band A service classification.
To address the situation, the commission issued Directive No. NERC/2026/002 titled “Special Compensation of Band A Customers Arising from Grid Generation Constraints.”
The commission stated that the directive was introduced in response to the substantial generation shortfalls recorded across the electricity sector between February and March 2026, which prevented some distribution companies from fulfilling their service obligations to Band A consumers.
NERC noted that the disruptions in electricity supply were primarily caused by circumstances beyond the operational control of the distribution companies.
According to the regulator, inadequate gas supply to power generation plants and repeated acts of vandalism targeting critical gas and transmission infrastructure contributed significantly to the decline in power generation and supply.
The compensation programme covers electricity service interruptions recorded between February and March 2026.
The commission explained that Band A feeders that maintained an average daily electricity supply of between 18 and 20 hours during the affected period would continue to benefit from the existing compensation framework established under Addendum No. NERC/2024/003.
Under the existing arrangement, both Maximum Demand (MD) customers and Non-Maximum Demand customers connected to such feeders remain eligible for compensation based on previously approved guidelines.
However, NERC introduced an additional compensation package specifically targeting Band A customers connected to feeders that failed to receive up to 18 hours of daily electricity supply during the period under review.
The commission clarified that feeders affected by the generation constraints would not be downgraded despite their inability to meet the prescribed service threshold.
For Non-Maximum Demand customers, the commission approved compensation equivalent to 20 percent of the February 2026 energy cap applicable to the affected feeder.
Similarly, Maximum Demand customers will receive compensation valued at 20 percent of the average energy billed per MD customer during February 2026.
NERC further explained that prepaid customers would receive the compensation through electricity token credits, while postpaid customers would benefit through direct adjustments to their electricity bills.
To ensure prompt implementation, the regulator directed distribution companies to complete compensation payments for February 2026 no later than May 31, 2026, while compensation for March 2026 must be fully implemented by June 30, 2026.
As part of consumer protection measures, NERC prohibited distribution companies from using compensation credits to offset any outstanding debts owed by customers.
The commission also directed DisCos to clearly communicate the value of compensation provided and the specific period covered to ensure transparency and accountability throughout the process.
Reaffirming its commitment to protecting electricity consumers, NERC stated that it remains focused on maintaining a balance between consumer welfare and the long-term sustainability of the electricity market.
The commission pledged to closely monitor implementation of the directive and verify compliance across all distribution companies to ensure that every eligible customer receives the approved compensation.
Industry data released by NERC recently showed that electricity distribution companies generated approximately N600 billion in revenue from consumers during the first quarter of 2026 despite ongoing challenges in the sector.
Operational figures provided by the Nigerian Independent System Operator during the same period highlighted the severity of the generation constraints.
The operator disclosed that thermal power plants require approximately 1,629.75 million standard cubic feet of gas per day to operate at full capacity. However, as of February 23, 2026, actual gas supply stood at only 692 million standard cubic feet per day, representing less than 43 percent of the required volume.
The sharp decline in gas availability forced several power plants to reduce output or shut down operations entirely, prompting the Transmission Company of Nigeria (TCN) to implement load-shedding measures to distribute the limited electricity available among distribution companies.
Throughout the period, many DisCos repeatedly attributed prolonged outages experienced by customers to inadequate gas supply to generating stations.
Despite the challenges recorded earlier in the year, some electricity consumers have reported noticeable improvements in power supply across several parts of the country in recent weeks.
