NERC moves to suspend DisCos’ operational funds over delayed meter refund obligations

The Nigerian Electricity Regulatory Commission (NERC) has taken a decisive step in its ongoing enforcement drive by announcing plans to withhold part of the operational expenditure (opex) funds allocated to electricity distribution companies that fail to comply with approved refund processes for customers who paid for meters under earlier schemes. The Commission said the action has become necessary following repeated delays and inconsistencies by some DisCos in reimbursing customers who funded their own meters under previous frameworks, especially the Meter Asset Provider (MAP) regulation.

According to NERC, the refunds are a mandatory obligation since customers who paid out of pocket for meters were supposed to be reimbursed either through energy credits or direct financial compensation, depending on the approved mechanisms. The Commission stated that despite several directives and reminders, many DisCos have not met the timeline for settling customer claims, creating growing frustration among consumers who expected to be refunded after fulfilling all procedural requirements.

NERC explained that withholding a portion of the DisCos’ opex is intended to serve as a strong regulatory deterrent and a means of compelling full compliance. The Commission noted that the failure to refund customers undermines public trust and contradicts sector-wide reforms aimed at improving transparency, fairness, and accountability in electricity billing. It added that meter acquisition and installation remain one of the most sensitive issues in the sector, with consumers relying on accurate metering to avoid estimated billing.

The regulatory agency stressed that the decision was informed by data showing that thousands of customers who purchased meters through approved channels were yet to receive their refunds despite submitting complete documentation. NERC officials described the default as unacceptable, considering that the refund mandate was introduced to relieve consumers of financial burdens while encouraging wider metering coverage across the country. By failing to honour their obligations, the DisCos, the Commission said, have acted contrary to agreed rules and have contributed to widening public dissatisfaction with electricity service delivery.

NERC also stated that the withholding of opex will be applied proportionally based on verified levels of non-compliance by each distribution company. The regulator noted that an audit of refund records, customer submissions, and DisCos’ internal reports has already begun. The Commission said that any company found to have misreported, delayed, or unjustifiably withheld refunds will face additional sanctions. These may include penalties, suspension of regulatory approvals, or directives for direct reimbursement under strict supervision.

The Commission further highlighted that the refund programme is essential not only for consumer fairness but also for sustaining widespread support for the national metering initiative. NERC maintained that customers must be encouraged to embrace new metering schemes without fear of being shortchanged. By ensuring refunds, the Commission said it aims to strengthen confidence in the process, motivate customers to participate in ongoing metering drives, and support financial stability in the power sector.

NERC also reminded the public that meter refunds are distinct from the free meters provided under the National Mass Metering Programme, where customers are not required to pay for installation. For those who paid previously under MAP, the Commission explained that refunds remain fully enforceable. It warned customers to avoid paying unofficial fees to field workers or agents, noting that all approved charges and refund processes are communicated directly by DisCos and monitored by the Commission.

In response to the announcement, industry analysts said NERC’s decision reflects the growing urgency to address persistent lapses in the sector. They noted that previous warnings issued to DisCos have had limited impact, making this latest enforcement step both necessary and timely. Analysts further observed that the refund issue has lingered long enough to erode customer confidence in the metering system and that firm regulatory action is required to correct these distortions.

Consumer groups also welcomed the move, arguing that it is unfair for customers to bear the financial burden of metering while DisCos continue to benefit from improved revenue protection made possible by the very meters that were paid for by consumers. They described NERC’s decision as a step in the right direction, adding that only consistent enforcement will help eliminate exploitative practices within the sector.

However, some stakeholders raised concerns about potential ripple effects if opex is withheld for extended periods, noting that DisCos may face operational strain. They argued that while enforcement is necessary, NERC must ensure that penalties do not inadvertently disrupt service delivery. Others stressed that the DisCos themselves must prioritise compliance, build stronger internal audit systems, and ensure refunds are processed promptly before regulatory penalties escalate.

NERC assured that its approach will be balanced and focused on ensuring compliance without destabilising network operations. The Commission reiterated that the primary goal is to protect consumers, uphold industry regulations, and ensure that metering reforms deliver the intended benefits.

As the enforcement phase progresses, NERC stated it will publish compliance reports and maintain open communication with stakeholders. The Commission emphasised that timely refunds, honest reporting, and respect for regulatory directives are essential for a more credible, efficient, and consumer-friendly electricity market.