In 2020, the Nigerian Electricity Regulatory Commission (NERC) introduced a customer classification model known as “banding” – Band A to E – meant to reflect the quality of electricity supply provided to consumers.
Band A customers were promised 20+ hours of power daily, Band B roughly 16 to 20, and so on, down to Band E, which gets the worst service. The logic was simple: those who get more electricity would pay more, while those with less would pay subsidized rates.
Five years later, the results are nothing short of disappointing. Even Band A consumers – those who have seen their tariffs increased sharply – are now experiencing erratic supply, unexplained outages, and poor response times from Distribution Companies (Discos). Generation Companies (Gencos) routinely complain of unpaid invoices, gas constraints, and grid instability. Meanwhile, the Federal Ministry of Power has become increasingly reactive, issuing vague press statements rather than implementing concrete reforms. The entire system is faltering – and Nigerians are left in darkness, both literal and bureaucratic.
The banding system was never inherently flawed. It aimed to create a cost-reflective market, attract private investment, and promote accountability. In theory, it should have incentivized Discos to improve service to higher-paying customers, while freeing government resources to support those at the bottom of the energy pyramid. But as with many reform efforts in Nigeria, the execution has been marred by inefficiency, lack of transparency, and a systemic failure to align incentives across the value chain.
The Gencos argue that their hands are tied. Many cannot produce electricity due to gas supply issues, largely because they are not being paid adequately or on time. The Nigerian Bulk Electricity Trading (NBET) company, the entity tasked with paying Gencos and managing market settlements, itself depends on revenue collected by the Discos. And here lies the fundamental flaw: Discos are not remitting enough. Whether due to technical losses, electricity theft, or simple mismanagement, the money doesn’t circulate. The result? Gencos idle, power supply drops, and Band A customers – those who pay the most – get fewer hours than promised.
Meanwhile, the Discos, often the public’s punching bag, cite inadequate allocation from the national grid. They claim that even when customers are willing to pay premium rates, the system cannot deliver sufficient megawatts to keep promises. In their defense, some Discos have made modest investments in transformers, meters, and feeder lines. But much of that effort is undercut by the national grid’s instability – managed by the Transmission Company of Nigeria (TCN), which is still government-controlled and beset by decades-old infrastructure and slow project execution.
In all of this, the Ministry of Power cannot claim innocence. Its role is to coordinate, regulate, and drive reforms across the sector. Yet, when the lights go out, Nigerians hear little more than blame-shifting between agencies. Where is the accountability? Why is there no binding service level agreement with penalties for failure to meet band obligations? Why are consumers still being migrated to higher bands and forced to pay more despite worsening supply?
The latest outrage comes from Band A consumers who have suffered power cuts for days at a time. Some now publicly question the rationale behind the tariffs they are being forced to pay. If customers in Band A cannot receive 20 hours of electricity, then the system is in breach – and NERC must intervene. Regulators must not simply act as tariff adjusters; they must enforce performance.
In 2024, NERC and the Ministry promised a shift to a service-based electricity market. That promise now rings hollow. Electricity access is not a luxury – it is a basic driver of economic growth, education, public health, and security. Without reliable power, businesses collapse, children cannot study, and hospitals revert to dangerous alternatives like diesel generators.
What Nigeria faces today is not a technical problem, but a governance problem. Until stakeholders across the power sector – Gencos, Discos, NBET, TCN, NERC, and the Ministry – are held to measurable standards with enforceable consequences, nothing will change.
The public deserves transparency. Nigerians deserve to know: What is the daily generation capacity? What is the actual load allocation? How many hours were delivered yesterday to Band A feeders? These are basic questions that should be available in real time – not shrouded in bureaucratic fog.
The time for half-measures is over. The Ministry of Power must overhaul its engagement with the public and demand accountability from every player in the value chain. Otherwise, the promise of banding will continue to be just another tariff hike masquerading as reform – while Nigerians remain trapped in darkness.
