NERC Orders DisCos to Refund Band A Customers Over 2026 Power Shortfalls – What it means for you.
Discos are refunding Nigerians. But is that what they really want?
Between February and March 2026, generation constraints across the Nigerian Electricity Supply Industry reduced electricity supply to many Band A customers. Band A customers are meant to receive a minimum of 20 hours of electricity daily, but supply in several areas fell below that threshold during the period.
In response, NERC set up a special compensation scheme for eligible Band A customers affected by the shortfall.
The compensation depends on how severely supply was affected. Band A customers already have a baseline legal protection set up by NERC which ensures that when daily supply dips slightly below the guaranteed 20 hours, DisCos are required to compensate affected customers automatically. Feeders that recorded between 18 and 20 hours of average daily supply during the covered period fall under that existing protection.
Feeders that fell below 18 hours qualify for special compensation equivalent to 20% of either the energy cap (the maximum amount of electricity a feeder is approved to bill customers for in a given month) or the average energy billed per customer for February 2026. Whether a customer receives compensation based on the cap or the average billed amount depends on whether they are on a maximum demand or non-maximum demand arrangement.
Critically affected feeders will also not be downgraded during the period covered by the directive. Under normal circumstances, when a feeder consistently fails to meet its service level agreement, customers on that feeder can be moved to a lower band, meaning fewer guaranteed hours of supply and lower tariffs to match. This directive suspends that mechanism, keeping Band A customers in their band while the compensation is processed. This is a meaningful protection and a departure from the standard regulatory response.
The compensation will be delivered differently depending on the customer's billing arrangement.
Prepaid customers will receive token credits, while postpaid customers will receive adjustments on their estimated bill. DisCos are not permitted to apply these credits towards existing customer debt, and customers must be informed of the value and period of compensation received. NERC has set deadlines of 31 May 2026 for February compensation and 30 June 2026 for March compensation.
This is a commendable strategy employed by NERC to show accountability, as few Nigerians have ever received a refund for bad service from a utility provider. That alone makes this directive worth noting. However, the question remains whether compensation is what Band A customers are really paying for. Credits acknowledge a service shortfall after it has occurred, but they do not restore the losses realised by homes and businesses for the hours of electricity that were lost. For customers paying premium tariffs on the expectation of near-continuous supply, compensation may soften the financial impact of an outage, but it is nowhere near the same thing as receiving the service level they signed up for in the first place. Nigerians are speaking up and rightfully so…
But one can’t ignore the efforts which the current stakeholders are putting in place to solve the ever-enduring national power crisis.
A refund or 24-hour supply? Which would you rather choose?
Source: NERC Public Notice, Directive No. NERC/2026/002, Special Compensation of Band A Customers Arising from Grid Generation Constraints (2026).
Fabian Omini
Energy Analyst
Fabian Omini is an energy analyst with a keen interest in translating complex energy and finance topics into clear, accessible narratives for everyday Africans.
