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Nepra officials warned Gepco over the illegal installation of Advanced Metering Infrastructure (AMI) on small meters. They said that the company was installing AMI without approval of the regulator and even without data backup. Photo: file
ISLAMABAD:
The National Electric Power Regulatory Authority (Nepra) has allowed the federal government to levy fixed charges of up to Rs350 per month on domestic consumers — including protected users — consuming up to 300 units, and to increase existing fixed charges by up to 100 per cent for consumers using up to 600 units.
At the same time, the regulator approved reductions of up to Rs4.58 per unit for various industrial categories and up to Rs1.53 per unit for certain domestic consumers.
In its decision on the federal government’s motion for tariff rationalisation for XWDiscos and K-Electric, Nepra stated that the revised tariff structure falls within the determined consolidated revenue requirement and the already budgeted tariff differential subsidy (TDS) of Rs249 billion for CY 2026.
The authority observed that the current tariff design is largely volumetric, with over 93 per cent of system costs recovered through per-unit charges, while only 7 per cent is collected as fixed charges. In contrast, major cost components — including generation capacity payments and NTDC/HVDC charges — are fixed and payable irrespective of electricity consumption, creating a mismatch between cost recovery and expenditure.
Nepra noted that the National Electricity Plan envisages a gradual shift toward a fixed-cost-based tariff structure, with fixed charges accounting for at least 20 per cent of total fixed costs. The rapid expansion of rooftop solar and other renewable sources has reduced grid demand, reinforcing the need to move away from consumption-based tariffs.
Under the revised structure, fixed charges for domestic consumers — excluding lifeline users — have been set between Rs200 and Rs675 per kW per month. For consumers using more than 300 units and Time-of-Use (ToU) connections, increases in fixed charges have been offset by reductions in variable rates. Revenue generated through fixed charges has been used to reduce cross-subsidies for industrial consumers, resulting in per-unit tariff cuts ranging from Re1 to Rs4.58.
Nepra said the revised tariff will enable the government to collect an additional Rs132 billion annually, raising fixed-charge revenue to Rs355 billion from the current Rs223 billion. As a result, total annual subsidies and cross-subsidies — currently estimated at Rs629 billion — are expected to decline to Rs527 billion.
The decision effectively eliminates a Rs102 billion cross-subsidy previously paid by industrial consumers to domestic users. To cover the gap, fixed charges have been extended to previously exempt residential consumers, including protected households.
Under the approved structure, protected consumers using 1-100 units will pay Rs200 per kW per month, while those using 101-200 units will pay Rs300 per kW. For non-protected consumers, fixed charges have been set at Rs275 per kW for 1-100 units, Rs300 per kW for 101-200 units, and Rs350 per kW for 201-300 units.
Fixed charges for non-protected consumers using 301-400 units have been doubled to Rs400 per kW per month, while charges for 401-500 units have been raised to Rs500 per kW. Consumers using up to 600 units will pay Rs675 per kW.
However, relief has been provided to higher-end consumers. Fixed charges for users consuming 601-700 units have been reduced by Rs125 per kW to Rs675, while those using more than 700 units will see a reduction of Rs325 per kW, also bringing their fixed charges down to Rs675.
Nepra also approved reductions in variable tariffs. Consumers using up to 400 units will receive relief of Rs1.53 per unit, those using up to 500 units Rs1.25 per unit, and 600-unit consumers Rs1.40 per unit. For users consuming 700 units, the reduction will be Rs0.91 per unit, while those exceeding 700 units will get relief of Rs0.49 per unit.
The decision has been forwarded to the federal government for notification within 30 days. Nepra said that if the government fails to notify the tariff within the stipulated period, the authority will publish it in the official Gazette itself.
