The National Electric Power Regulatory Authority (NEPRA) has rejected the federal government’s request to implement a new uniform schedule of tariff for K-Electric based on the old tariff rates from January to March 2023.

This decision is likely to cause disappointment within the Power Division.

In its decision issued on Tuesday, NEPRA set a new average uniform tariff of Rs31.59 per unit for both DISCOs and K-Electric for the financial year 2025–26, down from the previous rate of Rs32.73 per unit.

This reduction of Rs1.14 per unit also reflects the impact of Rs250 billion in subsidies (TDS).

The federal government, in its petition to NEPRA, argued that under government policy, uniform rates should apply to consumers of K-Electric and public DISCOs even after privatization, whether through direct subsidies or cross-subsidies.

However, NEPRA rejected this argument and ruled that K-Electric’s most recent tariff approved in May 2025 should form the basis for uniform rates, rather than the older rates from January–March 2023.

K-Electric’s Director of Finance, Ayaz Jaffer, requested that the recent tariff be used, while Naveed Qaiser from the Power Planning and Monitoring Company opposed this, stating the government had already requested a review of K-Electric’s new tariff and therefore the old tariff should be considered valid.

NEPRA determined that the new average residential tariff has been reduced from Rs28.33 per unit to Rs27.20 per unit, while the average commercial tariff has been set at Rs45.43 per unit (a reduction of Rs1.15 per unit). The rates for other categories were set as follows:

• Lifeline (up to 50 units): Rs3.95 per unit

• Lifeline (51–100 units): Rs7.74 per unit

• Protected 0–100 units: Rs10.51 per unit

• Protected 101–200 units: Rs13.01 per unit

• Unprotected 0–100 units: Rs22.44 per unit

• Unprotected 101–200 units: Rs28.91 per unit

• Unprotected 201–300 units: Rs33.10 per unit

• Unprotected 300+ units or Time of Use: Rs41.78 per unit

Rates for industrial, agricultural, and other users were also included in the new tariff:

• General Services: Rs43.17 per unit

• Industrial: Rs33.48 per unit

• Bulk: Rs41.76 per unit

• Agricultural: Rs30.75 per unit

• Other consumers: Rs32.68 per unit

According to NEPRA, Pakistan has a total of 37,994,210 electricity consumers, with projected overall consumption of 103,558 GWh.

The Power Division stated that capacity charges for FY2025–26 have been reduced by Rs186 billion, even accounting for an additional impact of Rs50 billion from the Jamshoro Coal Power Plant. This saving is attributed to revised estimates related to IPP contracts and currency valuations.

NEPRA clarified that the restructuring of inter-DISCO tariffs is not a revenue source for the federal government but is intended to facilitate consumers through subsidies totaling Rs249 billion.

The decision further noted that there is no inconsistency in the current industrial tariffs since the B4 tariff (including fixed and variable charges) is lower than B3, which in turn is lower than B2, benefiting consumers connected to high-tension lines due to reduced losses.

NEPRA also explained that the Time of Use (TOU) pricing system is critical for grid stability and economic management. If peak-hour rates are lowered, it would inevitably require higher off-peak rates, placing an additional burden on small industrial consumers and reducing electricity sales.

Finally, NEPRA specified that the decision also accounts for Rs. 58.68 billion in previous year adjustments (PYA), which will be recovered from consumers over the next 12 months.