NERC sets new rules to cut electricity transmission losses

In a significant move to bolster the efficiency and reliability of Nigeria's power sector, the Nigerian Electricity Regulatory Commission (NERC) has rolled out new regulations aimed squarely at curbing transmission losses. This initiative, formalized under Order No. NERC/2026/026 and effective from April 13, 2026, represents a critical step in ensuring that more of the electricity generated actually reaches consumers, thereby improving overall grid performance and supporting fair pricing.

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Under the new order, the Nigerian Independent System Operator (NISO) is required to install smart meters at all regional interconnection boundary points by December 2026 to ensure accurate measurement of energy flows.

The data clearly indicates a persistent challenge: while transmission loss factors have seen a slight improvement, dropping from 8.71% in 2024 to 7.24% in 2025, they still exceed the 7% benchmark set under the Multi-Year Tariff Order (MYTO). The new framework directly addresses this by mandating enhanced reporting and monitoring of these loss factors across the national grid.

A cornerstone of this new order is the requirement for the Nigerian Independent System Operator (NISO) to install smart meters at all regional interconnection boundary points by December 2026. This technological upgrade is essential for the accurate measurement of energy flows. NISO will also be tasked with measuring and documenting energy flow at power transformers and submitting quarterly reports on transmission losses to NERC.

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NISO is also expected to measure and document energy flow at power transformers in transmission substations and submit quarterly regional reports on transmission losses to the regulator.

Furthermore, the Transmission Company of Nigeria has been given a clear directive: submit an action plan by July 2026 with the objective of reducing transmission losses across all regions to no more than 6.5% by the end of 2026. This aggressive target, backed by the provisions of the Electricity Act 2023, underscores NERC's commitment to driving efficiency, accountability, and improved infrastructure management within Nigeria's electricity transmission system. These measures are vital for building a more robust and dependable energy future for the nation.

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The objective of this order is to enhance transparency, improve monitoring, and ensure efficiency in the management of transmission losses across the grid.