Power Division notifies fixed monthly charges on domestic consumers to recover Rs101 billion

The Power Division has issued a notification imposing fixed monthly charges on various categories of domestic electricity consumers as part of efforts to recover Rs 101 billion and reduce the cross-subsidy of Rs 4.04 per kWh.

Under the new plan, the fixed charges will vary based on monthly consumption. Protected consumers using up to 100 units per month have been exempt from the Rs 200 fixed charge. However, about 9.9 million consumers using less than 200 units will now be charged a fixed Rs 200 per month, while over 6.1 million protected consumers using up to 200 units will face a Rs 300 fixed charge.

For non-protected consumers who exceed the 100-unit threshold even once within six months, a Rs 275 fixed charge will apply to about 5.7 million users. Their per-unit tariff will also increase to above Rs 22.44, excluding taxes.

The charges for higher consumption slabs are as follows: consumers using 200-300 units will pay Rs 350, 301-400 unit consumers will pay Rs 400, and those using 401-500 units will be charged Rs 500. The highest fixed charge of Rs 675 per month will apply to consumers using over 500 units.

According to the notification, the Power Division has pointed out a structural misalignment between the sector's revenue requirements, which consist mainly of fixed costs, and the current tariff structure, which is largely based on volume. The issue has been further exacerbated by the growth of off-grid solar installations.

The new charges aim to address these imbalances while improving the financial health of the power sector.