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Tension In Power Sector: NERC Issues Fierce Threat To Generating Companies
The Federal Government has issued a stern warning to electricity generation companies (GenCos), cautioning that they risk being cut off from the national grid if they fail to implement the Free Governor Control (FGC) system across all their units.....KINDLY READ THE FULL STORY HERE▶
In an order referenced NERC/2025/094, dated August 26, 2025, and signed by NERC Vice-Chairman Musiliu Oseni and Commissioner for Legal, Licensing & Compliance Dafe Akpeneye, the Nigerian Electricity Regulatory Commission (NERC) directed that the new regulation take effect from September 1, 2025.
FGC is a vital stabilisation mechanism that enables turbines or generators to automatically adjust their output in response to frequency changes, thereby helping to maintain grid stability.
November Deadline for Compliance
According to NERC, any GenCo that fails to integrate and activate FGC by November 30, 2025, will face penalties amounting to 10 per cent of the invoice linked to each defaulting generating unit.
Furthermore, generating units that remain non-compliant for 90 consecutive days will be disconnected from the grid. Reconnection will only be permitted once the Nigerian Independent System Operator (NISO) certifies full compliance.
Grid Failures Prompt Stricter Rules
NERC explained that the directive became necessary following frequent national grid disturbances. In 2024 alone, the grid recorded eight incidents—five total collapses and three partial failures.
Reports from the Transmission Company of Nigeria (TCN) identified non-compliance with the Grid Code by certain GenCos as a major contributing factor. A recent performance review also revealed widespread failure of GenCos to activate FGC during operations.
Citing its powers under Section 34(1)(e) of the Electricity Act 2023, NERC reminded operators that the regulator is mandated to ensure reliability and quality of electricity supply. Similarly, Section 12.6.2 of the Grid Code requires every generating unit to be equipped with a fast-acting governor system capable of adjusting turbine speed and power output whenever frequency deviations occur.
Mandatory Meter Installation
As part of the new directive, NERC has ordered all GenCos to install Grade Level 5 IoT-enabled meters by October 31, 2025. These devices must measure and report active and reactive power, frequency, power factor, and generator terminal voltage.
NISO will be responsible for integrating the meters within 20 days of notification and conducting real-time monitoring of FGC operations. Monthly compliance reports will then be submitted to NERC for regulatory oversight.
Penalties for Defaulters
The Commission further stressed that penalties will be enforced through the market settlement system.
“Any GenCo that fails to comply with Sections 12.6.2 and 15.8.3 of the Grid Code by November 30, 2025, shall face a penalty of a prorated 10 per cent of the invoice associated with the defaulting generating unit.
Where a generating unit records 90 consecutive days of FGC non-compliance, it shall be disconnected from the grid,” NERC declared.
Proceeds from such penalties, the regulator added, will be remitted into the Ancillary Service Account.
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