Fixed Charges Linked to Load, Not Just Use, NEPRA

In a watershed public hearing held by the National Electric Power Regulatory Authority (NEPRA) on Tuesday, February 10, 2026, the government unveiled a fundamental shift in how millions of Pakistanis will be billed for electricity.

The core change? Fixed charges will now be levied based on a consumer’s sanctioned load (kW) rather than simply per connection. This “two-part tariff” is designed to recover the Rs2.56 trillion annual capacity costs that the state must pay to power plants, regardless of how much electricity is actually consumed.

How Your Bill Changes

Previously, fixed charges were largely avoided by low-use and “protected” consumers. Under the new 2026 structure, your sanctioned load (the maximum capacity your connection is allowed to draw) becomes the primary driver of the fixed cost.

Note: These charges apply even if you consume zero units in a month. They exclude 18% GST and other surcharges.

Winners and Losers

1. The Industrial Sector (The Winners)

The government “reluctantly conceded” that the industry has been fully freed from cross-subsidy for the first time.

• Rate Cut: Industrial tariffs will drop by an average of Rs4.04 per unit.

• Global Competitiveness: The goal is to bring industrial power costs down to roughly 11.50 cents per unit, helping Pakistani exports compete with regional peers like Vietnam and Bangladesh.

2. Residential Consumers (The Burden-Bearers)

With no representation at the hearing, the 28.5 million residential consumers will now shoulder the subsidy previously paid by the industry.

• Protected Consumers (1-100 units): Expected to see a 76% increase in their total bill due to the new Rs200-300 fixed base.

• Non-Protected (101-200 units): Likely to see a 21% to 31% increase in average costs.

• High Users (300-700 units): These consumers get a “sweetener”—while their fixed charges rise, their variable (per unit) rate will be reduced slightly to discourage them from switching to off-grid solar.

Why the Sudden Change?

The Power Division, led by Additional Secretary Mehfooz Bhatti, argued that the move is necessary to fix the “distorted” power sector.

• Capacity Payments: Most of Pakistan’s power bill consists of fixed “take-or-pay” costs to IPPs. By shifting this to residential fixed charges, the government aims to raise an additional Rs132 billion annually.

• Stopping the “Solar Flight”: By lowering the per-unit rate for high-end consumers and increasing the fixed cost, the government is making it less financially attractive for wealthy households to install solar panels and “abandon” the national grid.

What Happens Next?

NEPRA has reserved its judgment following the hearing. However, since the federal cabinet has already approved the framework (on Feb 4), the new charges are expected to appear in March 2026 billing cycles.

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