Nigeria’s electricity regulator has ordered distribution companies to issue refunds to Band A customers, the country’s highest-paying power consumers, after a wave of grid failures left many of them without electricity for stretches far short of the minimum daily supply they were promised.
The Nigerian Electricity Regulatory Commission on Thursday issued Directive No. NERC/2026/002, triggering a special compensation scheme for premium-tier subscribers whose feeders fell below 18 hours of daily supply between February and March 2026.
The commission said the disruptions stemmed from “significant generation shortfalls experienced across the Nigerian Electricity Supply Industry,” which it said were “largely attributed to inadequate gas supply and vandalism of critical gas and transmission infrastructure”, factors it acknowledged were “beyond the direct operational control of the DisCos.”
The directive sets compensation at 20 per cent of an affected customer’s approved energy cap or average monthly bill and covers both maximum-demand industrial users and ordinary residential subscribers on the premium tier.
But the provision drawing the sharpest attention is the one governing how those credits must be applied.
“Distribution companies are prohibited from offsetting compensation credits against any existing customer debt,” the directive states, a pointed response to longstanding complaints that utilities routinely absorb any financial adjustment against accumulated arrears before subscribers see a single naira of benefit.
Band A customers occupy a peculiar and often contentious position in Nigeria’s electricity market.
The tier was designed to give consumers willing to pay considerably higher tariffs access to feeders that receive priority supply, in theory, at least 20 hours a day.
In practice, recurring generation shortfalls and infrastructure attacks have repeatedly undermined that promise, fueling frustration about a two-speed system that charges premium prices while delivering unreliable service.
Under the new directive, feeders where average daily supply fell between 18 and 20 hours will be processed under the existing framework established in Addendum No. NERC/2024/003.
The special compensation provisions apply only when supply dropped below the 18-hour floor. Notably, the commission said “affected Band A feeders will not be downgraded during the covered period,” sparing customers the additional blow of losing their premium status on top of the supply shortfalls they already absorbed.
The mechanics of delivery split by customer type. Prepaid metering customers will receive compensation through token credits; postpaid customers through bill adjustments. NERC set firm deadlines: February payouts must be completed no later than May 31, 2026, and March payouts by June 30.
Beyond setting those dates, the commission served notice to utilities that it intends to hold them to account, saying it “will continue to monitor implementation and verify compliance by Distribution Companies to ensure all eligible customers receive the compensation due to them.”
The directive also requires that customers be kept informed throughout the process. DisCos must ensure that subscribers “are clearly informed of the value and period of compensation received”, a transparency requirement that, if enforced, would represent a meaningful departure from the opacity that has historically surrounded billing disputes in Nigeria’s electricity market.
Nigeria’s power sector has been dogged by structural gas supply constraints for years, with pipeline vandalism periodically compounding chronic underinvestment in generation capacity.
Analysts have warned that without a durable fix to the gas-to-power supply chain, Band A’s premium-service proposition will continue to face credibility problems regardless of how firmly the regulator polices compensation on the distribution side.
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