NEPRA considers significant electricity tariff hike proposal

The National Electric Power Regulatory Authority (NEPRA) is currently considering a request from the federal government to implement a uniform tariff for consumers of Distribution Companies (DISCOs) and K-Electric. This proposal would result in a significant Rs5.72 per unit increase in the electricity base tariff. NEPRA has scheduled a public hearing on July 8 to discuss and make a decision on this request, inviting stakeholders and the public to participate in the discussions.

If approved, the new tariff will lead to a substantial 19.2 percent increase in the base electricity tariff, with an estimated collection of Rs 486 billion from consumers. The proposed tariff, set to be effective from July 2024, aims to ensure uniformity in electricity pricing across the country and to help K-Electric recover its revenue requirements. To mitigate the impact of the tariff hike on consumers, the government plans to provide subsidies.

The Power Division has highlighted that the new rates will affect consumers differently, with most consumers experiencing a modest increase of less than two percent, while wealthier consumers may see a nine percent rise. The government is optimistic about a three percent reduction in electricity rates by January 2025 as the economy improves.

Furthermore, fixed charges are expected to cover 75 percent of the power sector's fixed costs, with a reduction of Rs 150 billion aimed at supporting the industrial sector. The finalization of the new electricity rates will occur after the NEPRA hearing.

The proposed electricity tariff hike, if approved, will bring significant changes to electricity pricing in the country. While the increase may vary for different consumer groups, the government's efforts to provide subsidies and support the industrial sector are aimed at minimizing the impact on consumers. Stay tuned for updates following the NEPRA hearing on July 8.