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Nepra officials warned Gepco about the illegal installation of Advanced Metering Infrastructure (AMI) on small meters. They said the company installed AMI without approval from the regulator and even without backing up data. Photo: file
ISLAMABAD:
The National Electric Power Regulatory Authority (Nepra) has allowed the federal government to levy fixed charges of up to Rs 350 per month from private consumers – including protected users – consuming up to 300 units and to increase existing fixed charges by up to 100 percent for consumers using up to 600 units.
At the same time, the regulator approved reductions of up to Rs 4.58 per unit for various industry categories and up to Rs 1.53 per unit for certain domestic consumers.
In its decision on the federal government’s tariff rationalization proposal for XWDiscos and K-Electric, Nepra stated that the revised tariff structure falls within the stipulated consolidated revenue requirement and the already budgeted Tariff Differential Subsidy (TDS) of Rs249 billion for CY 2026.
The authority noted that the current tariff design is largely volumetric, with over 93 percent of system costs covered via unit charges, while only 7 percent is collected as fixed charges. In contrast, significant cost components – including generation capacity payments and NTDC/HVDC charges – are fixed and must be paid regardless of electricity consumption, creating a mismatch between cost recovery and expenditure.
Nepra noted that the National Electricity Plan envisages a gradual shift towards a fixed cost-based tariff structure, with fixed charges accounting for at least 20 per cent of the 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 tariffs for residential consumers – excluding lifeline users – have been fixed at between Rs200 and Rs675 per line. kW per month. For consumers using more than 300 devices and Time-of-Use (ToU) connections, increases in fixed tariffs have been offset by reductions in variable tariffs. Revenues generated through fixed charges have been used to reduce cross-subsidisation to industrial consumers, resulting in tariff reductions per unit ranging from Re1 to Rs4.58.
Nepra said the revised tariff will enable the government to collect an additional Rs132 billion annually, raising fixed fee revenue to Rs355 billion from the current Rs223 billion. As a result, the total annual subsidies and cross-subsidies – currently estimated at Rs 629 billion – are expected. – to fall to Rs 527 billion.
The decision effectively eliminates a Rs.102 billion cross-subsidy previously paid by industrial consumers to residential users. To cover the gap, the fixed tariffs have been extended to previously exempt private customers, 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, flat rates are fixed at Rs 275 per kW for 1-100 units, Rs 300 per kW for 101-200 units and Rs 350 per kW for 201-300 units.
The flat rates for non-protected consumers using 301-400 units have been doubled to Rs 400. per kW per per month, while the charges for 401-500 units have been raised to Rs.500. per kW. Consumers using up to 600 units will pay Rs 675 per kW.
However, relief has been given to higher end consumers. Fixed charges for users consuming 601-700 units have been reduced by Rs125 per unit. kW at Rs675, while those using more than 700 units will see a reduction of Rs325 per kw. kW, which also brings their fixed charges down to Rs675.
Nepra also approved reductions in variable tariffs. Consumers using up to 400 units will get a relief of Rs 1.53 per unit. unit, those using up to 500 units, Rs 1.25 per For users consuming 700 units, the reduction will be Rs0.91 per unit.
The decision has been forwarded to the federal government for notification within 30 days. Nepra said if the government fails to notify the tariff within the stipulated time, the authority will publish it in the Official Gazette itself.
