The Nigerian Electricity Regulatory Commission (NERC) has revealed that electricity customers within the Abuja Electricity Distribution Company (AEDC) franchise area receive a substantial N28.99 billion monthly electricity subsidy.

This disclosure was made in NERC's Multi-Year-Tariff Order for AEDC released on May 21, 2025, highlighting the government's continued support for electricity consumers despite ongoing reforms in the power sector.

According to the regulatory body, the electricity subsidy has allowed tariffs for customers in Bands B to E to remain frozen at 2022 levels. This policy means that AEDC customers under these bands pay significantly less than the N209 per kilowatt-hour rate that would otherwise apply without government intervention.

"In line with the policy direction of the FGN on electricity subsidy, the allowed tariffs for Bands B-E customer categories shall remain frozen at the rates payable since December 2022, subject to further policy direction by the government. With this policy, the estimated subsidy benefit for customers under the AEDC franchise in 2025 is approximately N28.99 billion monthly," the NERC order stated.

Additional Regulatory Measures

The May order also revealed that NERC approved N1.69 billion from AEDC's total annual operational expenditure (OpEx) as a penalty, representing 10 percent of the amount overbilled by AEDC during the period from May to September 2023.

This regulatory action underscores NERC's commitment to protecting consumer interests while ensuring distribution companies operate within established guidelines.

It's worth noting that in 2024, AEDC announced 107 Band A feeders with customers paying N209 per kilowatt-hour for electricity. However, as of the time of this report, most AEDC customers have reportedly been upgraded to Band A classification.

The subsidy revelation comes amid ongoing discussions about electricity pricing in Nigeria and the government's efforts to balance affordability for consumers with the financial sustainability of the power sector.

While the subsidy provides immediate relief to consumers, energy sector analysts continue to debate the long-term sustainability of such significant government interventions in the electricity market, especially as Nigeria works to improve its power infrastructure and service delivery.