Despite repeated sanctions imposed on electricity distribution companies (DisCos) by regulators, overbilling and lack of metering continue to dominate customer complaints across Nigeria’s power sector, raising concerns about the effectiveness of enforcement measures and the pace of reforms.
For millions of electricity consumers, estimated billing remains a persistent source of frustration. Households and businesses continue to report receiving what they describe as arbitrary and inflated bills, often without corresponding electricity supply. The situation has fuelled distrust between customers and DisCos, even as regulatory authorities intensify efforts to improve service delivery and consumer protection.
Industry data indicate that billing disputes and metering issues consistently form the bulk of consumer grievances, routinely accounting for over 70 per cent to 80 per cent of all complaints nationwide.
The Rising Cost of Overbilling and Regulatory Interventions
An analysis of quarterly reports released by the Nigerian Electricity Regulatory Commission (NERC) in 2025 revealed that a total of ₦155.84 million was recorded as credit adjustments to be paid to electricity customers in 2025, following the resolution of billing-related complaints across the DisCos.
The quarterly breakdown shows that the credit adjustments (money to be credited back to customers) fluctuated throughout the year based on the resolution of filed complaints. In the first quarter (Q1), the Commission ordered that ₦32,214,301 be refunded to customers, ₦40,217,949 in Q2, ₦32,655,697 in Q3 and ₦50,750,223 in Q4. The reports showed that billing issues consistently ranked as one of the top categories of complaints, accounting for between 29.55 per cent and 37.37 per cent of all complaints filed directly with the Commission each quarter, closely followed by metering delays and failures at around 32 per cent.
In 2024, the amount for credit adjustments was even higher, as the NERC reported that DisCos were to refund a total of ₦105.05 billion to over two million electricity consumers nationwide who were overbilled that year.
The adjustments resulted from the Commission’s enforcement of the order on non-compliance with capping of estimated bills (orders NERC/2024/004 – NERC/2024/014), which became effective on February 12, 2024. The primary objective was to rectify instances where DisCos billed unmetered customers above approved monthly caps.
Pinnacle Daily recalls that NERC also announced that it sanctioned the 11 DisCos for non-compliance with capping estimated bills for unmetered customers. As part of sanctions for violating the regulations, the Commission then said it would deduct the sum of ₦10.5 billion from the annual revenues of the 11 DisCos, being 10 per cent of the total overbilling value.
The Commission had, in 2020, issued the Order on Capping of Estimated Bills (Order No: NERC/197/2020) and subsequently issued monthly energy caps, which aimed to align the estimated bills for unmetered customers with the measured consumption of metered customers on the same supply feeder.
Following its review, which revealed non-compliance with the monthly energy caps, NERC clarified that the regulatory measures (credit adjustments, fines, etc.) were to “safeguard unmetered customers from arbitrary billing by DisCos.
In April 2025, NERC imposed a ₦628 million fine on eight electricity distribution companies for over-billing their customers in the third quarter of 2024.
These adjustments represent the financial redress provided to customers for overbilling and other billing-related errors reported through the Commission’s Customer Complaint Unit (NERC-CCU).
Metering Crisis
The Nigerian Electricity Supply Industry has continued to grapple with a metering crisis, with millions of consumers not yet metered. The NERC Metering Factsheet for January and February 2026, released recently, showed that the number of metered customers as of January was 7,086,376, while total active customers stood at 12,232,130. The number of metered customers rose by 1.71 per cent (121,798) to 7,208,174 in February. While the metering rate increased from 57.93 per cent in January to 58.57 per cent in February, it means that approximately 5.1 million electricity customers remain unmetered.
Many customers argue that the lack of prepaid meters leaves them vulnerable to estimated charges that frequently exceed their actual consumption.
However, consumer advocates say the sanctions have yet to produce the desired impact.
Power sector analysts have said the issue is not just about imposing fines on the DisCos but also about taking practical steps to close the metering gap that has exposed millions of consumers to arbitrary billing. They also emphasised transparency and accountability.
The metering gap remains one of the sector’s most significant challenges. Various government initiatives, including the National Mass Metering Programme, have failed to adequately address the situation.
Industry analysts note that inadequate investment, foreign exchange constraints, supply chain challenges, and revenue shortfalls have slowed progress in meter rollout. While some distribution companies have reported improvements in metering coverage, demand continues to outpace deployment.
Impact on Households, Small Businesses
Small business owners have been particularly affected. For many enterprises already grappling with rising operating costs, unpredictable electricity bills add another layer of financial burden.
“I receive different bill amounts almost every month despite experiencing frequent power outages,” said a Lagos-based trader, Mark Udeh. “Without a meter, there is no way to verify what I actually consumed.”
Currently, we receive not more than six hours of electricity supply in a whole day, yet they give us crazy bills every month,” said Emeka Njoku, who operates a barbing shop.
“In the last three months, we have had very poor supply, yet they keep bringing the same amount and even higher,” Njoku added.
Apart from estimated billing conflicts, there is also the issue of the backlog of reimbursement of customers for meters acquired under the Meter Asset Provider (MAP) scheme. Under the MAP framework, consumers who pay upfront for their meters are legally entitled to refunds through energy tokens. However, compliance has historically lagged, prompting regulatory intervention, such as NERC’s recent amended order targeting the recovery and acceleration of over ₦20 billion in outstanding meter cost reimbursements.
Service Delivery vs. Tariff Bands
The tension has been further heightened by the implementation of Band A service guarantees (minimum 20 hours of daily supply). When generation constraints or gas shortages hit the grid, customers paying premium rates for power find themselves overbilled relative to the actual hours of electricity delivered.
In response, NERC issued an order directing DisCos to offer special compensation to Band A consumers affected by poor power supply in recent months due to grid-related constraints. It mandated a 20 per cent compensation credit of the approved energy cap, which must be credited to prepaid tokens or applied as a distinct bill adjustment for postpaid customers. It also stated that DisCos are prohibited from using these compensation credits to offset legacy debts.
Consumer groups have also expressed concern about the growing number of complaints related to faulty meters, delayed meter replacements, and poor customer service. In some cases, customers have reported waiting several months for meter installations after completing payment and documentation processes.
Electricity distribution companies, however, argue that the challenges are not entirely within their control. They point to liquidity constraints within the power sector, vandalism of infrastructure, energy theft, and rising operational costs as factors affecting service delivery and meter deployment.
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Experts believe that while sanctions remain an important regulatory tool, lasting solutions will require a combination of stricter enforcement, accelerated meter rollout, improved consumer engagement, and sustained investment across the electricity value chain.
Energy analyst Nick Agule said there is a need for comprehensive restructuring of the power sector, arguing that further increasing the electricity tariffs is not an antidote to challenges bedevilling the sector.
Agule, who spoke in an interview on Arise News, emphasised the need for prioritising investment in power infrastructure.
Funding Interventions
To bridge the metering gap, the federal government has adopted a strategy of deploying multiple financial interventions. Apart from the MAP framework, which allows third-party investors (Meter Asset Providers) to finance and deploy meters to customers who pay upfront in exchange for energy tokens, there is also the Presidential Metering Initiative (PMI). This initiative coordinates large-scale funding to accelerate meter procurement. Alongside the $500 million Distribution Sector Recovery Programme (DISREP), the target is to inject millions of metres into the system, directly confronting the liquidity crisis that previously left DisCos reliant on estimated billing for survival.
With the deployment of ₦700 billion secured from the Federation Account under the PMI, the government said the target is to deploy about 2 million smart meters annually over five years to eradicate estimated billing.
Victor Ezeja is a Nigerian journalist skilled in producing insightful news analyses, feature stories, and interviews that simplify complex issues and drive informed public discourse. His work combines rigorous research, balanced reporting, and compelling storytelling to highlight developments shaping industries and society. Victor, who holds a Master's Degree in Mass Communication, specializes in energy, aviation, business, and economic reporting. He can be reached via @VICTOREZEJA on X