Nigeria Introduces Stiffer Penalties for Electricity Theft to Combat Revenue Loss

The Nigerian Electricity Regulatory Commission (NERC) has announced stiffer administrative charges to combat the menace of electricity theft and other unauthorised or illegal connections, with charges ranging from ₦100,000 to ₦300,000.

The Regulator stated in paragraph 9 of the Amended Order on Unauthorised Access, Meter Tampering, and By-pass 2025 that the objectives of the Order shall be to mitigate unauthorised access to electricity supply through measures addressing tampering and meter bypass; and to establish clear guidelines for the reconnection of unauthorised connections ensuring transparency and compliance.

The Amended Order takes effect from 22nd January, 2025, replacing the 2017 Order. The move aligns with the Electricity Act 2023 and Customer Protection Regulations 2023, empowering distribution companies (DisCos) to disconnect illegal connections without prior notice and enforce stricter reconnection protocols.

Key Provisions of the Amended Order

Administrative Charges for Electricity Theft

1. Non-Maximum demand single Phase: First-time violators face a ₦100,000 administrative fee, rising to ₦150,000 for subsequent violations. This represents 100% increase from the 2017 Order.
2. Non-Maximum demand three Phase: First time violators face an administrative fee of ₦200,000 rising to N300,000 for subsequent violations. This also represents a 100% increase from the 2017 Order.
3. Maximum Demand Customers (e.g., industrial/commercial users): Administrative costs to be paid prior to reconnection shall be calculated using 450% of the customer’s last authorised recorded monthly bill for initial violations and 600% for repeat breaches. This increment translates to about 50% from the 2017 Order.

Reconnection Conditions

Offending customers are also expected to pay the costs or expenses of reconnecting them to the grid after being disconnected for unauthorised access including the full meter replacement costs where damaged. The cost of N10,000 is stipulated for Non-MD customers while MD customers are expected to pay N50,000 to deter future violations.

DisCos Decry Rising Energy Theft

The crackdown follows outcries from electricity distribution companies about the rampant meter tampering and illegal connections experienced by operators. The situation was said to have worsened after tariff adjustments for Band A customers became operational from April 2024 when the government initiated the payment of cost reflective tariff for customers getting up to 20 hours of power supply daily.

Ikeja Electric (IE) had reported a surge in theft, warning that offenders will face immediate prosecution. “The era of soft penalties is over. Energy theft threatens sector stability, and we will pursue legal action,” said Kingsley Okotie, IE’s Head of Corporate Communications.

Eko Electricity Distribution Company (EKEDP) echoed these concerns, estimating annual revenue losses in the billions of naira due to theft, bypass and other forms of unauthorized connections. Acting CEO Rekhiat Momoh stressed, “Energy theft starves DisCos of funds needed for grid upgrades, directly impacting service quality for paying customers.”

Why This Matters

Nigeria’s power sector loses an estimated of 25% of the energy delivered yearly due to energy theft, exacerbating liquidity crises and stifling infrastructure investments. Illegal connections overload transformers, causing frequent outages, safety hazards, and huge revenue loss. This Amended Order as stated by the Regulator is designed to deter theft through punitive charged, recover costs for damaged meters  and other assets, and recover lost revenue due to customer bad behaviour.

Challenges and Stakeholder Responses

Energy theft and other unauthorised connections are not unique to Nigeria alone. It is rampant across the world and countries have implemented varying measures to curb the menace using policy, legal, regulatory and other financial measures.

As with most laws and regulations, enforcement remains a key challenge. Many consumers sometime view electricity as a “national cake” or a “victimless crime,” thereby perpetuating a culture of non-compliance. DisCos like IE and EKEDP are launching grassroots campaigns to educate communities on the economic and safety risks of illegal connections. They usually hold periodic engagements with communities, traditional leaders and principals of community development associations.

You would recall that in November 2024, Jos Electricity Distribution Company had raised the alarm that over 80 transformers were vandalised and looted within 10 days in Plateau. The Company had declared zero tolerance, threatening to prosecute anyone caught. It is therefore important that all stakeholders work together to curb the menace.