The Federal government is mulling a change in the timing of electricity tariff rebasing from July 1 to January 1 each year to lessen the financial burden on consumers during the high-demand summer months.
As per media reports, the initiative, which stems from a proposal by the Power Division, has received a nod of no objection from the Finance Ministry.
However, the Finance Division has advised the Power Division to discuss this proposal with development partners including the International Monetary Fund (IMF), World Bank, and Asian Development Bank (ADB) as part of broader reform efforts before presenting it to the Economic Coordination Committee (ECC).
The National Electric Power Regulatory Authority (Nepra) currently sets the consumer-end tariffs for Distribution Companies (Discos) and K-Electric under the regulatory framework established by the Regulation of Generation, Transmission and Distribution of Electric Power (Amendment) Act, 2021, in conjunction with Nepra (Tariff Standards and Procedure) Rules, 1998. The most recent uniform tariff was officially declared on July 14, 2024, under SRO No. 1039(I)/2024.
Under existing regulations, Discos must initiate the tariff determination process annually by January 31, leading to a series of regulatory proceedings including internal meetings, public hearings, and finally, tariff notifications by the government.
Traditionally, these rebasing adjustments are announced in July, coinciding with peak summer consumption and often leading to substantial increases in consumer electricity bills due to higher usage and fuel charge adjustments.
Acknowledging the public dissatisfaction and nationwide protests triggered by these summertime bill spikes, the Power Division has proposed that adjusting the timing of tariff rebasing to January could help distribute the cost impact more evenly across the year and alleviate consumer distress.
The Power Division has outlined the plan and is seeking ECC approval for two key recommendations: to issue policy guidelines directing Nepra to amend the legal and regulatory framework to shift the annual tariff rebasing to January 1, and to authorize the Power Division to approach Nepra for the implementation of these policy guidelines.
