Govt plans to collect Rs132 billion from households through new fixed charges

• Officials say fixed charges will range from Rs200 to Rs675 per kilowatt per month, linked to sanctioned load rather than actual consumption

The federal government has proposed new fixed monthly electricity charges for domestic consumers and a reduction in per-unit tariffs for 2026, a restructuring expected to collect an additional Rs132 billion annually while shifting Rs101 billion in subsidies from households to the industrial sector.

The proposal was presented as the National Electric Power Regulatory Authority opened hearings on a petition filed by the Power Division. The hearing was chaired by Nepra Chairman Waseem Mukhtar, with officials from the Power Division and the Power Planning and Monitoring Company briefing the regulator on the revised tariff structure. No representative appeared on behalf of more than 28.5 million residential consumers who will be subject to the fixed charges.

Under the plan, fixed charges will apply for the first time to both protected and non-protected domestic consumers, including households using up to 300 units per month. Previously, fixed charges were applicable only to non-protected consumers exceeding 300 units.

Officials said fixed charges would range from Rs200 to Rs675 per kilowatt per month, linked to sanctioned load rather than actual consumption. A household with a 2kW sanctioned load would pay Rs400 per month at Rs200 per kW, while a 5kW load at Rs500 per kW would result in a Rs2,500 monthly charge. A 6kW load at Rs675 per kW would attract Rs4,050 per month.

For protected consumers, a fixed charge of Rs200 per month has been proposed for those using up to 100 units and Rs300 for up to 200 units. Subsidies for these slabs would be reduced by Rs51 billion, lowering total subsidy support to Rs423 billion.

For non-protected consumers, proposed fixed charges are Rs275 per month for up to 100 units, Rs300 for up to 200 units and Rs350 for up to 300 units. Subsidies amounting to Rs29 billion have been withdrawn from the first two slabs and Rs21 billion from the 201 to 300 units category.

Consumers using 301 to 400 units would see fixed charges rise to Rs400 from Rs200. Those in the 401 to 500 units bracket would pay Rs500 instead of Rs400, while fixed charges for 600 units would increase to Rs675 from Rs600.

For higher consumption levels, fixed charges for up to 700 units would be reduced by Rs125 to Rs675, while those using more than 700 units would see a reduction of Rs325, also bringing their charge to Rs675.

Officials said the revised fixed charges are expected to generate Rs101 billion annually, which would be used to subsidise electricity tariffs for industry. The government aims to lower industrial power tariffs by up to Rs4.04 per unit as part of the restructuring.

Alongside the new fixed charges, reductions in per-unit rates have also been proposed. Consumers using 400 units would receive a cut of Rs1.53 per unit, while those using up to 500 units would get Rs1.25 per unit relief. For 600 units, the proposed reduction is Rs1.40 per unit.

Consumers using 700 units would receive a reduction of 91 paisa per unit, while those consuming more than 700 units would get a cut of 49 paisa per unit.

Nepra is expected to issue its decision after completing consultations with stakeholders.