The Nigerian Electricity Regulatory Commission (NERC) has issued a fresh regulatory directive introducing a digitized, transparent, and accountable framework for electricity revenue collection across the country.
The new guideline, titled “Guidelines on Registration and Engagement of Third-Party Collection Service Providers”, was released on Wednesday and signed by NERC Chairman, Sanusi Garba. It takes immediate effect and is backed by Section 226 of the Electricity Act 2023.
The directive primarily targets Electricity Distribution Companies (DisCos) operating in states without established electricity markets. According to NERC, the move supports the Federal Government’s drive for a cashless economy and aims to enhance oversight of electricity revenue within the Nigerian Electricity Supply Industry (NESI).
Under the new rules, DisCos are strictly prohibited from using unlicensed agents to collect electricity bills. Only third-party Collection Service Providers (CSPs) with valid permits from the Central Bank of Nigeria (CBN), integration with the Nigeria Inter-Bank Settlement System, and proper tax compliance will be eligible for engagement.
“These Guidelines seek to provide clear guidance to DisCos on the registration process, applicable service charges, and standardised engagement of third-party agents,” the directive stated. It also aims to strengthen revenue collection, ensure efficiency in contracts, and reduce the risk of revenue loss from outsourcing.
To regulate service fees, NERC has capped commissions across all payment channels. For instance, USSD transactions below ₦5,000 will attract a maximum charge of ₦20, while rural agents may charge up to 3.25% per transaction, capped at ₦2,000.
Industrial and commercial consumers classified as Maximum Demand customers will continue to enjoy zero commission charges on their electricity payments, reinforcing an earlier NERC Order (NERC/183/2019) that banned cash payments for high-volume electricity users.
The framework enforces digital payments through USSD, Point-of-Sale (PoS) terminals, mobile wallets, vending kiosks, and internet banking. All existing contracts between DisCos and CSPs must be submitted for regulatory compliance within 90 days or face sanctions.
NERC emphasized that no CSP shall operate without a CBN license, and all collection agreements must receive Commission approval before becoming effective. Contracts must also include key performance indicators, clearly stated transaction account details, and be routinely evaluated.
The Commission added that approved commission rates will remain in force until revised and all existing contracts must be regularised within the stipulated timeframe.
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