Govt Readies Plan to Shock Non-Solar Consumers With New Electricity Billing Model

The National Electric Power Regulatory Authority (NEPRA) has concluded a hearing on revising electricity tariffs and fixed charges which may increase the burden on non-solar users.

During the hearing, officials from the Power Division outlined a major restructuring plan aimed at reducing the burden on the industrial sector while revisiting cross-subsidy mechanisms across consumer categories.

Following the decision, the industrial tariff will be reduced by Rs. 4.4 per unit. For the first time, the Rs. 101 billion cross-subsidy currently borne by the industrial sector will be eliminated in the billing cycle.

At present, the industrial sector contributes Rs. 101 billion in cross-subsidy to domestic consumers. Commercial consumers contribute Rs. 90 billion, while general services consumers bear Rs. 35 billion in subsidies.

Power Division officials further informed the hearing that net metering consumers generated 35 billion units of electricity. They stated that if these consumers had remained on the national grid, there would have been a difference of approximately Rs. 3 per unit.

It was also revealed that consumers collectively carry a burden of over Rs. 614 billion in the form of tariff differential subsidies (TDS) and cross-subsidies, while large consumers face an additional Rs. 453 billion burden due to tariff differentials. Officials said it is time to determine how this burden should be distributed.

The briefing highlighted that fixed charges have been increased from 7 percent to 10 percent. Meanwhile, the number of protected consumers has surged from 9.4 million to over 21.5 million, partly due to the impact of net metering.

Officials maintained that tariff rationalisation is essential to revive industrial activity since Pakistan’s industrial electricity tariff is currently the highest in the region. After restructuring, the industrial rate is expected to fall to 11.5 cents per unit, and further to 10.5 cents under a proposed three-year package.

Responding to concerns about solar policy, officials explained that the earlier decision to promote net metering was justified at a time when energy shortages were acute. They emphasised that net metering was not discouraged and that the previous solar policy was not flawed but a step in the right direction.