The Nigerian Electricity Regulatory Commission (NERC) has taken a decisive step to enhance transparency and accountability in electricity revenue collection by issuing comprehensive new guidelines governing third-party bill collection service providers (CSPs). The regulatory directive, released on May 29, 2025, aims to streamline operations within the Nigerian Electricity Supply Industry (NESI) and strengthen revenue inflows for electricity distribution companies (Discos).
Signed by NERC Chairman Sanusi Garba, the document titled “Guidelines on Registration and Engagement of Third-Party Collection Service Providers” is an enforceable framework that takes immediate effect. It is grounded on the powers granted by Section 226 of the Electricity Act 2023, marking a significant milestone in NERC’s efforts to regulate and formalize third-party payment channels within the power sector.
The guidelines respond directly to the Federal Government’s broader initiative to promote a cashless economy, aiming to reduce revenue leakages and increase efficiency in electricity bill payments nationwide. Under the new rules, Discos are prohibited from engaging unlicensed agents or third-party vendors who lack the necessary Central Bank of Nigeria (CBN) permits and verified integration with the Nigeria Inter-Bank Settlement System (NIBSS).
Only collection service providers compliant with tax regulations and possessing valid licenses will be eligible to partner with Discos. This move is designed to safeguard consumers and ensure proper monitoring of all transactions related to electricity payments.
NERC emphasized the importance of adopting digital platforms, which include USSD codes, point-of-sale (POS) terminals, vending kiosks, mobile wallets, and internet banking services, as the standard for all electricity bill collections moving forward.
A notable feature of the new guidelines is the introduction of capped commission rates for bill payment transactions to protect consumers from excessive charges. For instance, USSD transactions below N5,000 will attract a maximum commission fee of N20, while rural agents may charge up to 3.25% per transaction, capped at N2,000.
Critically, Maximum Demand (MD) customers—which typically represent large industrial and commercial users—will continue to enjoy zero commission charges on bill payments. This exemption is a continuation of NERC’s earlier Order No. NERC/183/2019, which eliminated cash payments and commission fees for large-scale electricity consumers to reduce costs for industrial operators.
To ensure strict adherence, all Discos must submit existing contracts with CSPs to NERC for review and approval within 90 days. Non-compliance may attract regulatory sanctions, reinforcing the commission’s commitment to robust enforcement.
The guidelines stipulate that no third-party collection service provider shall be engaged without prior approval from NERC and possession of a valid CBN license. Each contract between Discos and CSPs must outline clear performance indicators and transaction account details and be subject to ongoing evaluation.
NERC also requires transparency regarding transaction accounts used in collection activities, mandating that any changes or additions to these accounts be promptly reported to the commission.
The new regulatory framework promises to curb revenue leakages that have historically plagued Nigeria’s electricity sector, improving the financial health of Discos and ultimately contributing to a more reliable power supply for consumers.
By institutionalizing digital payments and setting clear rules for third-party engagements, NERC aims to foster trust between electricity providers and customers, reduce operational inefficiencies, and encourage private sector participation in the power market.
Furthermore, the emphasis on proper licensing and tax compliance is expected to reduce fraudulent activities and unregulated cash handling in electricity payments, which have been a major challenge for Discos and regulators alike.
NERC’s guidelines on third-party electricity bill collections represent a significant reform aimed at modernizing Nigeria’s electricity revenue system. By enforcing digitized transactions, regulating commission fees, and tightening oversight on third-party agents, the commission is laying the groundwork for a more transparent, efficient, and customer-friendly power sector.
For consumers and industry stakeholders, these changes signal a move toward greater accountability and improved service delivery, in line with Nigeria’s broader economic and regulatory reforms.