NEPRA approves uniform power tariff for FY26

July 02, 2025 (MLN): The National Electric Power Regulatory Authority (NEPRA) has approved a uniform consumer-end power tariff for all state-owned distribution companies (XWDISCOs) and K-Electric for fiscal year 2025-26, effective from July 1, 2025.

This follows a motion filed by the Ministry of Energy (Power Division), endorsed by the Federal Cabinet, seeking to implement a uniform tariff structure inclusive of targeted subsidies and inter-DISCO tariff rationalization.

Under the new framework, the total revenue requirement for XWDISCOs for FY26 is set at Rs3,520 billion, down Rs247bn from last year, leading to a reduction of Rs1.50/kWh in the average base tariff, as per the notification issued by NEPRA.

This adjustment primarily reflects a decrease in power purchase costs, aided by renegotiated IPP contracts and a favorable exchange rate impact, with capacity charges dropping by Rs186bn.

The tariff rebasing aims to better align the reference tariff with actual costs, minimizing variations and improving predictability for consumers.

Despite the overall cut, the Federal Government will provide around Rs249bn in subsidies to support various consumer categories.

Effective tariffs (before taxes) will see reductions across segments.

For example, domestic consumers using 101-200 units (protected) will now pay Rs13.01/kWh, down Rs1.15 from the previous rate, while commercial and industrial categories will also see reductions of around Rs1.14-1.45/kWh.

The new tariff also continues to enforce a uniform structure across regions and utilities, ensuring that both XWDISCOs and K-Electric maintain parity, supported by direct and indirect subsidies.

During NEPRA’s public hearing, industry bodies including KATI, KCCI, and BQATI raised concerns over high peak rates, tariff anomalies for bulk consumers, and called for reforms in net metering caps and billing methodologies.

NEPRA acknowledged these concerns, noting that structural studies are underway, especially regarding the impact of distributed generation on the grid and appropriate time-of-use slot adjustments.

NEPRA’s decision also incorporates prior year adjustments (PYA) of Rs58.68bn, which will be recovered over 12 months.

Post this period, the tariff will be revised downward again by removing the PYA impact.

The revised tariff schedules have been forwarded to the Federal Government for formal notification, paving the way for implementation from July 1, 2025.

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