NEPRA approves 4.2% reduction in electricity tariff for Discos, lowering rate to Rs34/unit for FY 2025-26

The National Electric Power Regulatory Authority (NEPRA) has approved a 4.2% reduction in the national average electricity tariff for power Distribution Companies (Discos) for FY 2025-26, bringing it down to Rs34 per unit from the previous rate of Rs35.50 per unit. 

According to a news report, this decision, which will come into effect on July 1, 2025, follows NEPRA’s Multi-Year Tariff (MYT) framework.

NEPRA has also determined separate tariffs for each of the Discos based on their respective revenue requirements, including the Power Purchase Price (PPP). However, it remains unclear whether the Discos or the government will seek a review of these determinations.

The revised tariffs for individual Discos are as follows:

• Islamabad Electric Supply Company (IESCO) – Rs29.28/kWh 
• Gujranwala Electric Power Company (GEPCO) – Rs33.82/kWh 
• Faisalabad Electric Supply Company (FESCO) – Rs32.69/kWh 
• Lahore Electric Supply Company (LESCO) – Rs31.18/kWh 
• Multan Electric Power Company (MEPCO) – Rs34.68/kWh 
• Peshawar Electric Supply Company (PESCO) – Rs37.20/kWh 
• Quetta Electric Supply Company (QESCO) – Rs41.54/kWh 
• Sukkur Electric Supply Company (SEPCO) – Rs35.63/kWh 
• Hyderabad Electric Supply Company (HESCO) – Rs44.36/kWh 
• Tribal Areas Electric Supply Company (TESCO) – Rs44.93/kWh 
• Hazara Electric Supply Company (HAZECO) – Rs33.49/kWh 

In its assessment, NEPRA has forecasted a modest 2.8% increase in electricity demand for FY 2025-26, which is significantly lower than the 5% growth projected by the Central Power Purchasing Agency-Guaranteed (CPPA-G). This lower demand projection is based on the stagnation in electricity generation in recent years, as evidenced by actual generation data from FY 2023-24.

Additionally, NEPRA has approved an average PPP of Rs25.06 per unit for the fiscal year, factoring in macroeconomic assumptions such as an exchange rate of Rs290/USD and inflation rates both domestically and internationally.

Despite the tariff reductions, NEPRA has expressed concerns over the exchange rate and energy price fluctuations and called for revised forecasting scenarios based on updated macroeconomic data.

On Tuesday, NEPRA reduced the national average Power Purchase Price (PPP) for the fiscal year 2025-26 to Rs25.98 per unit, a decrease of 3.77% or Rs1.02/unit from the current rate of Rs27/unit. 

Nepra’s latest determination sets the total national PPP at Rs3.342 trillion for FY26, with Rs3.066 trillion or Rs26.34 per unit allocated for ex-Wapda Distribution Companies (XWDiscos).