The Nigerian Electricity Regulatory Commission (NERC) has disclosed that the Service-Based Tariff (SBT) model was designed primarily to protect electricity consumers and ensure they pay only for the level of service they actually receive.
The Commission stated the tariff model is aimed at improving fairness, transparency, and supply reliability in the power sector, while also motivating electricity distribution companies (DisCos) to enhance service delivery.
Senior officials of the commission, who spoke while featuring on the Electricity Town Hall, a radio programme sponsored by NERC, described the SBT as a framework that ties customer tariffs directly to the quality of service received.
Speaking, a senior manager in NERC’s Economic Regulation Division, Abdulaziz Aloba, said the new system replaces the old flat-rate tariff, which treated all customers the same regardless of supply hours.
He said, “The service-based tariff intends to improve service delivery to end-use customers, ensuring that tariffs are reflective of the services enjoyed by customers as provided by the distribution companies.
“Before the SBT, people who got 20 hours of supply and those who got four hours paid the same rate. That was unfair. Now, customers only pay for the energy actually delivered to them”. He said.
Also speaking, a deputy manager in the same division, Gbenga Osho, said the SBT categorises customers into five service bands A to E, based on the average number of supply hours received daily.
According to him, Band A customers are to enjoy electricity for a minimum of 20 hours; Band B: minimum of 16 hours; Band C: minimum of 12 hours; Band D: minimum of 8 hours; and Band E: minimum of 4 hours.
He disclosed that while tariffs for Bands B to E have been frozen since December 2022, Band A customers, who enjoy the most stable supply, currently pay ₦209.50 per kilowatt-hour.
“NERC also reviews tariffs monthly to maintain fairness and transparency,’’ he said.
Osho said NERC now monitors DisCo performance daily and mandates companies to publish supply data on their websites and social media pages.
“Transparency is key. Both we and customers monitor supply performance, and if there’s a dispute, the Commission steps in to resolve it,” he said.
On his part, the Head of Tariff and Charges at NERC, Dr Ibrahim Tajudeen, said the Commission recognises “lifeline customers”, those whose consumption does not exceed 50 kilowatt-hours monthly.
“For lifeline customers, the tariff is just ₦4 per kilowatt-hour. That’s to ensure the poorest households can still access electricity,” he noted.
He added that while the government still subsidises tariffs for most customers, only Band A currently pays cost-reflective rates.
“The government bears the cost difference for Bands B to E so that power remains affordable,” he said.
Tajudeen further stated that the SBT framework mandates compensation for customers whenever a DisCo fails to meet its service level.
“Where a feeder underperforms, the affected customers must be compensated. We publish lists of such feeders monthly, and DisCos are required to notify their customers by email, SMS, or WhatsApp,” he explained.
He said NERC verifies that compensation is actually delivered and can also order the downgrading of a service band if a DisCo consistently fails to meet its obligations.
Tajudeen noted that more Nigerians are beginning to appreciate the fairness of the new tariff system, especially as it reduces dependence on costly generators and solar systems.
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