The Federal Government has approved a compensation package for Band A electricity customers who experienced inadequate power supply due to generation shortfalls on the national grid between February and March 2026.
The approval was announced by the Nigerian Electricity Regulatory Commission (NERC) in a public notice released on Thursday. According to the regulator, the compensation is aimed at addressing service failures that prevented some Band A customers from receiving the minimum electricity supply guaranteed under their tariff category.
NERC explained that the decision followed widespread generation constraints within the Nigerian Electricity Supply Industry (NESI) during the first quarter of 2026. These challenges affected the ability of electricity distribution companies (DisCos) to meet their service commitments to customers.
To address the issue, the commission issued Directive No. NERC/2026/002 on the Special Compensation of Band A Customers Arising from Grid Generation Constraints.
The regulator noted that the power shortages were largely caused by inadequate gas supply to power plants and the vandalism of key gas and transmission infrastructure. These factors, NERC said, were beyond the direct control of electricity distribution companies.
Under the directive, customers connected to Band A feeders that received between 18 and 20 hours of electricity daily during the affected period will continue to benefit from the existing compensation framework established under Addendum No. NERC/2024/003.
However, additional compensation has been introduced for Band A customers connected to feeders that recorded less than 18 hours of average daily electricity supply between February and March 2026. NERC clarified that such feeders will not be downgraded during the compensation period.
For non-maximum demand customers, compensation will amount to 20 percent of the approved February 2026 energy cap applicable to the affected feeder. Maximum demand customers will receive compensation equivalent to 20 percent of the average energy billed per customer in February 2026.
The commission stated that prepaid customers will receive their compensation through electricity token credits, while postpaid customers will benefit through adjustments to their electricity bills.
NERC directed all electricity distribution companies to complete compensation for February 2026 by May 31, 2026, while compensation for March 2026 must be concluded on or before June 30, 2026.
To ensure transparency and consumer protection, the regulator prohibited DisCos from using compensation credits to offset existing customer debts. It also instructed companies to clearly inform beneficiaries about the value and period covered by the compensation.
Reaffirming its commitment to protecting consumers and maintaining stability in the power sector, NERC said it would closely monitor implementation and verify compliance to ensure all eligible customers receive their entitlements.
Industry data released by the commission showed that electricity distribution companies collected approximately ₦600 billion from consumers in the first quarter of 2026 despite ongoing operational challenges.
Operational figures from the Nigerian Independent System Operator revealed that thermal power plants require about 1,629.75 million standard cubic feet of gas daily to operate optimally. 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 gas shortage forced several power plants to reduce operations or shut down, while the Transmission Company of Nigeria implemented load shedding measures to distribute the limited electricity available across the country.
Although distribution companies repeatedly attributed the outages to gas supply constraints, many Nigerians have reported noticeable improvements in electricity supply in recent weeks.
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