NERC new guidelines impose strict commission caps and mandate re-registration for all electricity collection partners by 2025

According to a regulatory document released this week, the NERC new guidelines have introduced sweeping changes to how third-party agents collect electricity payments across Nigeria, marking one of the most far-reaching reforms in the sector in years.

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The Nigerian Electricity Regulatory Commission issued the new framework to curb opaque revenue practices that have hampered liquidity in the power industry.

Coming into effect on 1 November 2025, the rules impose strict commission caps on all external electricity bill collectors and compel every distribution company to re-register each partner before 31 December 2025 or face sanctions.

Signed by NERC’s Vice Chairman, Musiliu Oseni, the guidelines standardise payment channels nationwide, covering USSD, mobile apps, PoS agents, banking platforms and rural vendors.

The move represents another determined push towards Nigeria’s long-standing policy of cashless electricity payments, first initiated in 2019 when the regulator ordered DisCos to migrate key customer groups to electronic platforms.

Despite previous directives, cash transactions remained widespread, especially in rural areas where unregistered agents charged arbitrary fees.

Operators said some of these charges far exceeded approved limits, draining revenues and worsening NESI’s persistent liquidity crisis.

The new framework tightens eligibility for those wishing to operate as Collection Service Providers. Only entities licensed by the Central Bank of Nigeria are permitted to participate, including banks, payment service providers, switching firms, mobile money operators and super-agents.

All CSPs must submit extensive documentation, ranging from incorporation papers and tax clearance to sub-agent lists and NIBSS integration agreements, alongside a non-refundable registration fee of N100,000.

Under the regime, commission caps are now firmly set. USSD transactions below N5,000 must not exceed N20, while those above N5,000 are capped at N50.

Banking and switching channels face a ceiling of 0.75 per cent, capped at N2,000. Wallets, mobile services, PoS, kiosks and rural agents are subject to varying limits between 1.10 per cent and 3.25 per cent, with a maximum cap of N5,000.

The rules also prohibit CSPs from charging for unrelated services, including IT support or marketing.

NERC further mandated that all contracts must be prefunded, except for banks and switching companies which must settle on a T+1 basis. Maximum Demand customers remain exempt, as they are required to pay directly into DisCo accounts without third-party involvement.

While the regulator insists the overhaul will improve transparency and cut losses, smaller agents fear that the 3.25 per cent cap and hard N5,000 limit could force them out of business, particularly in low-density rural communities where collections are minimal.

With the deadline approaching, DisCos must now race to revalidate thousands of agreements across fintech firms, payment providers, PoS aggregators and remote agents.

Any CSP not cleared by 31 December 2025 will be barred from operating under the strict enforcement powers outlined in the Commission’s compliance framework.

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Observers say that if properly implemented, the reform could deliver a powerful boost to sector liquidity and help close NESI’s long-standing revenue gap.