NERC Imposes New Technical, Commercial, and Reporting Requirements on Distribution Companies

By Martha Godwin

Electricity Distribution Companies (DisCos) in Nigeria have been instructed to adopt new technical, commercial and reporting obligations under the Nigerian Electricity Regulatory Commission’s (NERC) Net Billing Regulations 2026.

The regulations aim to deepen renewable energy integration by allowing consumers with solar power systems and other renewable installations to export surplus electricity to the national grid.

Customers wishing to connect renewable energy systems under a net billing arrangement must submit applications to their distribution company together with specified technical and ownership documents.

Required documents include proof of ownership or occupation of the premises, a certified single‑line diagram of the proposed interconnection showing switching and protection systems, and technical specifications of the renewable energy installation.

Existing systems must also provide generation history or performance data where available, previous approvals or registration documents, projected annual electricity generation capacity, details of energy storage systems, and a certified inspection report confirming safety and compliance with applicable standards.

The regulation places significant responsibilities on DisCos, especially in evaluating and approving grid interconnection applications.

After receiving a complete application, a DisCo is expected to conduct a technical feasibility assessment of its distribution network and communicate approval or rejection within 15 days.

According to NERC, this process is intended to ensure the safe integration of renewable energy systems without compromising the stability and reliability of the electricity network.

The regulations also require DisCos to provide net meters after customers have paid the required connection charges.

These meters must measure electricity imported from and exported to the grid.

NERC states that approved meters must be either revenue‑grade import/export meters or dual‑register smart meters that comply with the national metering code and include time‑of‑use functionality.

If time‑of‑use meters are unavailable at commissioning, distribution companies may temporarily deploy NEMSA‑certified bidirectional meters, subject to prior approval by the commission.

In terms of billing and settlement, DisCos must now issue detailed monthly bills to prosumers—customers who both consume and generate electricity.

The bills must clearly show energy imported and exported in kilowatt‑hours, applicable import and export tariffs, monthly charges and credits in naira, carried‑forward credit balances, and the net payable amount for the billing cycle.

The regulation further requires DisCos to maintain dedicated accounting ledgers for prosumer credits and reconcile these balances monthly.

One of the most extensive provisions of the new framework imposes broad reporting obligations on distribution companies.

DisCos must keep accurate and up‑to‑date registers of all approved net billing installations within their franchise areas, publish quarterly data on approved systems, and provide periodic reports on applications received, approved, rejected, or pending.

They are also expected to disclose network upgrade projects undertaken to support net billing integration across their operational areas.

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