National Electric Power Regulatory Authority has notified to impose fixed charge of up to Rs 350/month on domestic consumers-including protected one- using up to 300 units.
These charges have been increased 100% in the existing charges for those using 301 to 600 units.
The total fixed charges have been levied from Rs200/kW/ month to Rs.675/kW/month.
The regulator also allowed a reduction of up to Rs.4.58/unit and Rs 1.53/unit, respectively for different categories of Industrial and Domestic consumers.
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“The revised tariff proposed by the Federal Government is within the determined consolidated revenue requirement of all the XWDISCOs and already budgeted TDS of Rs.249 billion for the CY 2026, the Authority has no objection in approving the Motion,” NEPRA said in its decision on the Federal Government motion for rationalization of tariff of XWDiscos and K-Electric.
In its decision, the Authority noted that present consumer end tariff design is volumetric in nature, whereby over 93% of the total system cost is being recovered on units consumed basis (Rs/kWh) and remaining 7% as fixed charge i.e. Rs/kW/month. On the other hand, capacity charges of generation companies, NTDC/ HVDC costs etc., are fixed costs, which are required to be paid monthly, irrespective of electricity consumption by the consumers. These fixed costs, accounts for significant portion of total revenue requirement of Distribution companies. Thus, there is a mismatch between incurring of cost (fixed in nature) and its recovery mechanism (consumption based). The NE Plan also provides that fixed charges shall be progressively incorporated in the tariffs of all consumer segments, which shall account for at least 20% of the fixed cost. With rapid penetration of rooftop solar and other renewable energy sources, grid-based electricity demand is declining. This shift has necessitated to gradually move away from volumetric nature tariff towards a more fixed cost-oriented tariff structure.
Here it is also pertinent to mention that for domestic consumers, above 300 units & ToU consumers, the increase in fixed charges has been off-set by corresponding reduction in their variable charge. The amount so recovered through fixed charges, has been utilized to reduce the existing cross subsidy of industrial consumers, and resultantly, their variable rate has been reduced ranging from Rs. 1/unit to Rs.4.58/unit for different categories.
The proposed revision of the GoP applicable uniform tariff is within the determined requirement of XWDISCOs and already budgeted Tariff differential subsidy (TDS) of Rs.249 billion, the decision said.
With the recent increase of up to 100 per cent in fixed charges and levying of fresh fixed charges on some categories of domestic consumers-including protected consumers- will help the government to collect an additional Rs 132 billion annually. It is projected that with the revised mechanism the Federal Government collection on account of fixed charges will increase to Rs 355 billion from the existing Rs 223 billion.
However, the net impact on the cross subsidy will be Rs101 billion as the government has reduced the tariff by up to 1.53 per unit for various categories of domestic consumers for the CY2026.The government is presently paying Rs 629 billion annual subsidy/cross subsidies to various categories of consumers, which will be reduced to Rs 527 billion through the imposition and revision of fixed charges, the official said.
The decision will help scrapping the Rs 102 billion (Rs 4.04/unit) cross-subsidy paid by industry to domestic consumers. To cover the deficit, fixed charges will be imposed on previously exempt residential consumers, and existing charges for other domestic users will be increased by up to 100%.
Previously only non-protected users consuming more than 300 units per month were subject to fixed charges, while protected domestic consumers using 1 to 200 units per month, and non-protected consumers using 1 to 300 units per month were exempted from the charges. However, as per the decision fixed charges will be extended to households consuming up to 300 units a month, including protected consumers.
Similarly, for protected consumers, levying a fixed charge of Rs 200 per/KW/month on the consumers using 1-100 units and Rs300/KW/month for those consuming 101-200 units was approved by the authority. For non-protected consumers, fixed charges of Rs 275/KW/month for usage 1-100 units, Rs 300 /KW/month for 101-200 units and Rs350/KW/month for 201-300 units was approved by the regulator.
NEPRA also allowed 100 percent increase in fixed charges for non-protected consumers using 301–400 units which will rise to Rs 400/KW/month from earlier Rs 200/KW/month, while those consuming 401–500 units would pay Rs 500/KW/month against previous Rs 400/KW/month. For users consuming 600 units, fixed charges would increase to Rs 675/KW/month from earlier Rs 600/KW/month.
However, for upper slabs of consumers using above 601 units per month, some relief is approved by the regulator. Fixed charges for up to 601-700-unit would be reduced by Rs 125/KW/month to Rs675/KW/month from the earlier Rs 800/KW/month, while those consuming more than 700 units would see a reduction of Rs 325/KW/month, also bringing their fixed charge to Rs 675/KW/month from Rs 1000//KW/month.
The regulator also allowed reductions in per-unit tariffs for domestic consumers. Households using 400 units would get a relief of Rs1.53 per unit, while those consuming up to 500 units would see a cut of Rs1.25 per unit. For 600-unit consumers, the proposed reduction is Rs1.40 per unit.
Users consuming 700 units would receive a reduction of Rs 0.91 per unit, and those using more than 700 units would get a cut of Rs 0.49/unit.
The Decision is being intimated to the Federal Government for the purpose of notification within 30 Calendar days from the intimation of this Decision, NEPRA said and added that in the event the Federal Government fails to notify the subject tariff Decision within the time period, the Authority shall notify the same in the official Gazette.
