The Nigerian Electricity Regulatory Commission (NERC) has issued fresh guidelines, mandating electriciting distribution companies (DisCos) to utilise a digital, transparent, and accountable framework for electricity revenue collection.

The new framework was released on Wednesday, May 28, 2025, and was signed by the NERC chairman, Sanusi Garba.

NERC bans cash collection by DisCos

The new directive takes effect immediately and is based on the commission’s powers as enshrined in Section 226 of the Electricity Act 2023.

They are targeted at electricity distribution companies (DisCos) operating in states or places that have no established electricity markets.

According to the new directive, the move aligns with the Nigerian government’s plan for a cashless economy and aims to tighten controls over electricity revenue inflows into the Nigerian Electricity Supply Industry (NESI).

NERC bars DisCos from using unlicensed agents

The new guideline prohibits DisCos from engaging unlicensed agents for bill collections.

It stated that only third-party collection service providers with valid Central Bank of Nigeria (CBN) licenses, verified integration with the Nigeria Inter-Bank Settlement System (NIBSS), and tax compliance will be allowed to operate.

The commission stated that it issued the guideline to boost revenue collection in NESI, ensure the efficiency of revenue collection contracts, and reduce the risk of revenue losses from DisCos’ engagement of third-party agents.

Electricity bill: NERC introduces commission payments

NERC also introduced a limit on commission rates across all payment platforms.

It disclosed that USSD transactions below N5,000 will attract an N20 commission, while rural agents may charge about 3.25% per transaction, subject to the N2,000 cap.

To protect industrial and commercial customers, NERC said maximum demand customers will continue to enjoy commission-zero charges on their bill payments.

The policy is based on the commission’s prior order, which eliminated cash payments for large-scale electricity users.

The new guideline now wants to institutionalise digital payments across all platforms, including USSD codes, PoS terminals, vending kiosks, mobile wallets, and Internet banking channels.

NERC said the order applies to all CSPs and DisCos, stating that no CSP shall be engaged by a DisCo without a CBN license and that all third-party collection service agreements and contracts entered into with any distribution company under NERC’s oversight are subject to its approval and registration before transaction commencement.