In a significant move aimed at revolutionizing revenue collection within the Nigerian Electricity Supply Industry (NESI), the Nigerian Electricity Regulatory Commission (NERC) has released comprehensive new guidelines mandating a fully digitized, transparent, and accountable framework for electricity bill payments. The directive, titled "Guidelines on Registration and Engagement of Third-Party Collection Service Providers," was officially unveiled on Wednesday, May 28, 2025, and bears the signature of NERC Chairman, Sanusi Garba.
Taking immediate effect, this crucial regulatory intervention is rooted in the powers vested in the commission by Section 226 of the Electricity Act 2023. While applicable across the board, the guidelines are particularly targeted at electricity distribution companies (DisCos) operating in states that have yet to establish their own distinct electricity markets.
NERC emphasizes that this strategic shift aligns seamlessly with the Federal Government's broader objective of fostering a cashless economy. More critically, it seeks to introduce tighter controls over electricity revenue inflows, thereby minimizing leakages and enhancing financial accountability within the NESI.
Under the new framework, the engagement of unlicensed agents for bill collections is now strictly prohibited for DisCos. Only third-party collection service providers holding valid Central Bank of Nigeria (CBN) permits, demonstrating verified integration with the Nigeria Inter-Bank Settlement System (NIBSS), and exhibiting strict tax compliance will be deemed eligible to operate. This stringent vetting process is designed to professionalize the collection ecosystem and safeguard revenue.
The official document outlines the multifaceted objectives of these guidelines: "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."
Furthermore, NERC anticipates that the initiative will "enhance revenue collection in the NESI, ensure the efficiency of revenue collection contracts and minimise the risk of loss of revenue arising from DisCos’ engagement of third-party collection service providers."
In a bid to regulate costs and protect consumers, the commission has also introduced capped commission rates across all payment channels. For instance, USSD transactions below ₦5,000 will now incur a maximum commission of ₦20. To ensure accessibility in underserved areas, rural agents may charge up to 3.25 percent per transaction, albeit subject to a cap of ₦2,000.
Notably, industrial and commercial consumers, classified as maximum demand (MD) customers, will continue to benefit from zero commission charges on their bill payments, a policy carried over from NERC’s earlier Order No. NERC/183/2019, which had previously eliminated cash payments for large-scale electricity users.
The latest guidelines significantly expand upon this earlier order, aiming to institutionalize digital payments across all channels. This comprehensive approach encompasses USSD codes, point-of-sale (PoS) terminals, vending kiosks, mobile wallets, and internet banking platforms, effectively pushing for a fully digital revenue collection landscape.
All DisCos are now mandated to submit their existing third-party collection service provider (CSP) contracts for regulatory compliance review within a strict 90-day period. Failure to adhere to this directive could result in severe sanctions from the commission.
NERC has explicitly outlined the conditions for engagement: "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."
The directive further states that DisCos must adopt more efficient and cost-effective collection channels, and that all collection service contracts must detail clear performance indicators and be regularly evaluated. Critically, "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."
This robust framework is designed to prevent revenue diversion and ensure that funds are properly accounted for. The approved commission rates are set to remain in force until amended by the commission, and all existing contracts must be regularized within the stipulated 90-day timeframe from the effective date of these new guidelines.