ISLAMABAD: The National Electric Power Regulatory Authority (NEPRA) has provisionally raised the incremental electricity rate for industrial and agricultural consumers from Rs22.98 to Rs25.30 per unit, warning that the government’s failure to provide a full cost assessment could shift costs onto other consumers.
The Nov. 6 decision applies to consumers of ex-WAPDA distribution companies and K-Electric from November 2026 billing. It keeps the Incremental Consumption Package (ICP) running at the new rate until a comprehensive assessment of marginal cost is completed. NEPRA rejected the Ministry of Energy’s request to apply the rate retroactively to October, noting that billing was largely finished.
The Authority was divided. Members Amina Ahmed and Engineer Maqsood Anwar Khan dissented, arguing the package should be suspended until the Power Division submits a complete, verifiable review. Chairman Waseem Mukhtar used his casting vote to continue the package. The decision has been sent to the federal government for Gazette notification.
NEPRA stressed that Rs25.30 is provisional and not a final determination of actual marginal cost.
NEPRA said the Power Division failed to complete the first mandatory semi-annual review despite repeated directions. It returned one submission as incomplete in September and held a public hearing Oct. 5 after the ministry asked it to conduct the review itself. The Rs25.30 figure came from the Power Planning and Monitoring Company, which proposed a generation mix of 50 percent spot RLNG and 50 percent contracted Qatar RLNG.
NEPRA’s own analysis, using system operator data, estimated marginal costs at the consumer end at Rs29.65 per unit for the review period, with monthly peaks of Rs42.01 in April and Rs49.65 in May. The regulator cautioned that these figures are not final because of data gaps and unresolved variances.
NEPRA acknowledged that, due to the delayed review, other consumers have paid the gap between actual marginal cost and the package rate through fuel cost adjustments. Industrial stakeholders asked that the differential be recovered from package beneficiaries or credited back. NEPRA held that captive-to-grid migration does not by itself undermine the package’s goals, but directed the ministry to find a way to identify and act against misuse by furnace-oil-based captive consumers.
The dissenting members said Rs25.30 lacks a credible link to actual marginal cost and rests on a notional generation mix. They noted that NEPRA’s tariff team first estimated marginal cost at about Rs31.83 per unit, later revised to Rs29.65, and that the higher figure exceeds the normal off-peak rate, which could defeat the package’s incentive purpose.
Mukhtar said suspension was not appropriate now, but warned that missed deadlines could lead to suspension or termination in the second review and possible legal proceedings against entities that fail to provide data.
The Power Division must submit a comprehensive review of both review periods, with PLEXOS modelling comparing the system with and without incremental consumption, along with recommended rates and whether the package should continue. Data is due Nov. 25, with remaining information due Dec. 3. Under the original decision, the package ends immediately if upward adjustments are required in two consecutive reviews.
