The Nigerian Electricity Regulatory Commission (NERC) has issued new regulatory guidelines to digitise and tighten revenue collection processes within the Nigerian Electricity Supply Industry (NESI).
The directive, titled “Guidelines on Registration and Engagement of Third-Party Collection Service Providers,” was released on Wednesday and signed by the Commission’s Chairman, Sanusi Garba.
The guidelines, which take immediate effect, are anchored on Section 226 of the Electricity Act 2023. They primarily target electricity distribution companies (DisCos) operating in states yet to establish their electricity markets. According to NERC, the move aligns with the Federal Government’s push for a cashless economy and aims to improve accountability and efficiency in electricity revenue inflows.
“These guidelines seek to provide clear guidance to DisCos on modalities for the registration of third-party collection agents, including applicable service charges; promote transparency and accountability in revenue collections from electricity sales by third-party collection service partners engaged by DisCos; and standardise the use and engagement of third-party collection service partners,” the document read.
NERC has now prohibited DisCos from using unlicensed agents for bill collections. Only third-party collection service providers (CSPs) with valid permits from the Central Bank of Nigeria (CBN), verified integration with the Nigeria Inter-Bank Settlement System (NIBSS), and full tax compliance will be eligible to operate.
To further regulate payment processes, the Commission introduced capped commission rates across various transaction channels. USSD transactions under N5,000 will carry a maximum commission of N20, while rural agents may charge up to 3.25% per transaction, with a cap of N2,000. Notably, industrial and commercial consumers classified as maximum demand (MD) customers will continue to enjoy zero commission charges on bill payments.
The directive builds on NERC’s earlier Order No. NERC/183/2019, which had eliminated cash payments for large-scale electricity consumers. The new guidelines aim to institutionalise digital payments across platforms such as USSD codes, point-of-sale (POS) terminals, vending kiosks, mobile wallets, and internet banking.
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Under the new framework:
“No CSP shall be engaged by a DisCo without the applicable CBN licence/permit. All third-party collection service agreements/contracts entered into with any DisCo under the regulatory oversight of the commission are subject to the commission’s approval and registration before the commencement of the transaction,” NERC stated.
“All DisCos shall adopt more efficient and cost-effective channels for collection, and collection service contracts shall be refunded.”
“All collection service contracts/agreements shall detail clear performance indicators for the collection provider and shall be regularly evaluated by the DisCo.”
“All collection service contracts/agreements shall specify the transaction account details before the approval of the commission, provided that subsequent additions to the listed accounts shall be filed with the commission.”
“Any collection from MD customers shall attract no commission payment to the third-party collection agent.”
“The above-approved commission/rates shall remain in force until amended by the commission. All existing and operating contracts must be regularised within 90 days from the effective date of these guidelines.”
DisCos are now required to submit all existing contracts with CSPs to the Commission for compliance within 90 days. Failure to do so may result in regulatory sanctions.
NERC reiterated that the guideline’s objective is to improve the overall efficiency of electricity billing and collection systems across the country.