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Nepra officials have warned Gepco against illegal installation of advanced metering infrastructure (AMI) on small meters. They said the company was installing AMI without regulator approval and even without data backup. Photo: file
ISLAMABAD:
The National Electric Power Regulatory Authority (Nepra) has authorized the federal government to levy fixed charges of up to Rs 350 per month on domestic consumers – including protected users – consuming up to 300 units, and 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 ruling on the federal government’s motion to rationalize tariffs for XWDiscos and K-Electric, Nepra said the revised tariff structure is 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 percent of system costs recovered through unit charges, while only 7 percent is collected as fixed charges. In contrast, major cost components – including payments for generation capacity and NTDC/HVDC charges – are fixed and payable regardless of electricity consumption, creating a mismatch between cost recovery and expenditure.
Nepra noted that the National Electricity Plan envisages a gradual move towards a tariff structure based on fixed costs, with fixed charges representing at least 20 percent of total fixed costs. The rapid expansion of rooftop solar and other renewable sources has reduced demand on the grid, reinforcing the need to move away from consumption-based tariffs.
Under the revised structure, fixed charges for domestic consumers – excluding lifeline users – have been fixed at Rs200 to Rs675 per kW per month. For consumers using more than 300 time-based units and connections (ToU), increases in fixed tariffs have been offset by reductions in variable tariffs. Revenue generated from fixed charges was used to reduce cross-subsidies for industrial consumers, resulting in unit tariff reductions ranging from Re1 to Rs4.58.
Nepra said the revised tariff will enable the government to collect an additional Rs 132 billion annually, thereby increasing fixed charge revenue to Rs 355 billion from the current Rs 223 billion. As a result, the total annual subsidies and cross-subsidies – currently estimated at Rs 629 billion – are expected to decline to Rs 527 billion.
The decision effectively eliminates a cross subsidy of Rs 102 billion previously paid by industrial consumers to domestic users. To fill this gap, fixed charges were extended to previously exempt residential consumers, including sheltered households.
Under the approved structure, protected consumers using 1 to 100 units will pay Rs 200 per kW per month, while those using 101 to 200 units will pay Rs 300 per kW. For unprotected consumers, the fixed charges have been fixed at Rs 275 per kW for 1 to 100 units, Rs 300 per kW for 101 to 200 units and Rs 350 per kW for 201 to 300 units.
Fixed charges for unprotected consumers using units 301 to 400 have been doubled to Rs 400 per kW per month, while charges for units 401 to 500 have been increased to Rs 500 per kW. Consumers using up to 600 units will pay Rs 675 per kW.
However, some relief has been provided to high-end consumers. Fixed charges for users consuming between 601 and 700 units have been reduced from Rs 125 per kW to Rs 675, while those using more than 700 units will see a reduction of Rs 325 per kW, also bringing down their fixed charges to Rs 675.
Nepra also approved reductions in variable rates. Consumers using up to 400 units will get relief of Rs 1.53 per unit, those using up to 500 units Rs 1.25 per unit and consumers of 600 units Rs 1.40 per unit. For users consuming 700 units, the discount will be Rs 0.91 per unit, while those above 700 units will get a relief of Rs 0.49 per unit.
The decision was sent to the federal government for notification within 30 days. Nepra said that if the government fails to notify the tariff within the stipulated time, the authority will itself publish it in the Official Gazette.
