ISLAMABAD: The federal government has approached the National Electric Power Regulatory Authority (NEPRA) for approval of a three-year incremental consumption package, proposing a flat rate of Rs22.98 per kilowatt-hour (kWh) for industrial and agricultural consumers to stimulate demand and optimize system utilization.
NEPRA will conduct a public hearing on November 11, 2025, to consider the government’s motion filed through the Power Division.
According to the Power Division, electricity demand across major consumer categories has contracted over the past three years due to macroeconomic adjustments, changing consumption patterns, and growing adoption of alternative energy sources such as net metering, which now accounts for over 6,000 MW. The decline has been particularly steep in the industrial and agricultural sectors, with consumption falling by 14 percent and 47 percent, respectively.
According to industry sources, this shrinking demand has created a cycle of underutilized system assets and rising tariffs caused by unrecovered fixed costs. The proposed incentive aims to reverse this trend by encouraging higher consumption during surplus generation periods—especially daytime solar hours—without additional infrastructure burden.
Previous incentive programs, such as the Industrial Support Package (Nov 2020–Oct 2023), led to a 14 percent increase in industrial sales, while the Bijli Sahulat Package (Dec 2024–Feb 2025) boosted industrial growth by up to 10.2 percent in some months. These results demonstrate that well-targeted incentives can strengthen the power sector, support economic productivity, and sustain employment.
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Under the new package, industrial and private agricultural consumers of both DISCOs and K-Electric will be charged Rs22.98 per unit on incremental consumption above their baseline, determined from December 2023 to November 2024. The scheme will remain effective for three years from the date of NEPRA’s approval and will be subsidy-neutral for both categories of consumers.
The motion also specifies that positive fuel cost adjustments (FCAs) will apply to incremental units, while negative FCAs, quarterly tariff adjustments (QTAs), and debt service surcharges (DSS) will not. Semi-annual reviews will ensure that the tariff remains aligned with revenue requirements, and the scheme will automatically terminate if two consecutive reviews necessitate tariff hikes. Additionally, if aggregate incremental consumption in the industrial and agriculture sectors exceeds 25 percent of the baseline, the government will review the rate structure to account for additional marginal costs.
The motion has been filed under Sections 7 and 31 of the NEPRA Act, read with Rule 17 of the NEPRA (Tariff Standards and Procedure) Rules, requesting NEPRA to incorporate the Cabinet-approved incentive package into the tariff structure to enable its implementation in accordance with the approved policy framework.
The proposed scheme, the government emphasized, is designed to encourage higher energy utilization in productive sectors, stabilize grid operations, and boost industrial output — all while maintaining fiscal neutrality and ensuring affordability for key economic drivers.
If approved, the Rs22.98/kWh package would form part of the government’s broader effort to stimulate industrial and agricultural output while maintaining financial discipline in the energy sector, in line with commitments to the IMF and ongoing power market reforms, said sources.
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