Nepra Industrial Tariff Rises to Rs25.30 a Unit

The Nepra industrial tariff rose to Rs25.30 per unit on Friday, as the power regulator approved a controversial revision of its industrial support package despite dissent from two of its own members. The decision also adds Rs2.37 per unit to every consumer’s November bill under the monthly fuel cost adjustment, to recover Rs25 billion.

The National Electric Power Regulatory Authority (Nepra) announced the revision in Islamabad on Friday. The new rate replaces Rs22.98 per unit under the incremental support package (ISP), introduced in December last year to revive industrial activity. Industrialists have protested since May, saying it failed to benefit them and pushed their bills up instead.

A 2-2 split settled by the chairman’s vote

The authority split evenly on the revision. Member Tariff Amina Ahmed and Member Development Maqsood Anwar opposed the new rate in a joint dissenting note, while the chairman and Member (Law) backed it. With the vote tied 2-2, Chairman Waseem Mukhtar used his casting vote to approve Rs25.30 per unit.

The two dissenting members called the revised rate a “random number” unsupported by evidence. They said Nepra’s own calculations put the marginal cost of supplying incremental electricity at Rs31.83 per unit, not Rs25.30. On that basis, they called for the package to be suspended at once until authentic data became available.

Mr Mukhtar endorsed the dissenters’ reasoning, saying their conclusions “need serious consideration”. Yet he ruled that suspending the package now would not be appropriate, and the Ministry of Energy should get another chance to supply the information repeatedly sought. “I hereby exercise, in due and faithful discharge of the functions of the Authority, my second and casting vote envisaged and entrusted to me under the Nepra Act in favour of the First Opinion,” he wrote, “thereby breaking the deadlock.”

Why the Nepra industrial tariff is under strain

At the heart of the dispute sits a missed deadline. The ISP was due for review after its first six months, in June, so the rate could be reassessed against the lessons of its early run. That review never took place. The Power Division, which runs the scheme, asked for a revision only after repeated reminders from Nepra, and it has still not supplied the revised calculations it owed six months ago.

All four members held the Power Division and its subordinate bodies responsible for failing to meet their legal duties within the set timelines. They noted that neither the Independent System and Market Operator nor the Power Planning and Monitoring Company had supplied the marginal price in proper form, even though both were duty-bound to do so. The members warned that any body which misses the new deadlines could face suspension or termination of the programme, and legal proceedings under the relevant law.

The dissenting members also set out why the gap matters for ordinary consumers. Extra industrial use lifts the system’s average fuel cost, which is recovered from all consumers through the fuel cost adjustment. Incremental units also sit outside quarterly tariff adjustments, so excluding them pushes a larger adjustment onto consumers who do not use the package. In their view, other consumers should not pay for a review the energy ministry was meant to submit five months ago.

What the higher rate means for households and industry

The November fuel cost adjustment lands on top of a power sector already under strain. Distribution companies sought a Rs1.34 per unit increase for December, and a grid failure earlier added Rs400 billion to electricity bills. Energy imports cost the country Rs3.5 trillion a year, which keeps pressure on tariffs even as the government tries to hold industrial rates down.

Households feel the same squeeze from prices more broadly. Short-term inflation climbed to 12.31 per cent in the week ended November 5, driven by costly food and liquefied petroleum gas. Against that backdrop, an extra Rs2.37 per unit in November bills will be felt in homes as well as factories.

For industry, the picture is mixed. The package was meant to cut power costs for factories that use more electricity, yet manufacturers say it has not delivered. The trade deficit widened to $14.6 billion in July-October, which shows exporters still face headwinds. A rate set below the true marginal cost may look like support, but the dissenting members argue it simply shifts the bill onto other consumers.

Frequently asked questions

What is the new Nepra industrial tariff?

It is Rs25.30 per unit for incremental electricity use under the industrial support package, up from Rs22.98. The rate applies to industrial consumers who use more power than their baseline.

Why did two Nepra members oppose the increase?

Members Amina Ahmed and Maqsood Anwar said Rs25.30 was a “random number” with no evidence behind it. Nepra’s own figures put the marginal cost at Rs31.83 per unit, so they wanted the package suspended until authentic data was available.

What is the extra Rs2.37 charge in November bills?

It is a fuel cost adjustment that distribution companies will charge all consumers in November to recover an additional Rs25 billion. It applies across distribution companies, including K-Electric.

What happens if the Power Division misses the new deadlines?

Nepra has warned that failure to supply the required information could lead to suspension or termination of the support package, along with legal proceedings against the responsible bodies.