Government Proposes New Fixed Electricity Charges for 2026

The Federal Government has proposed a substantial restructuring of the electricity tariff regime for 2026, introducing fixed monthly capacity-based charges for domestic consumers alongside reductions in per-unit energy rates. The proposed framework is projected to generate approximately Rs132 billion annually, while reallocating an estimated Rs101 billion in subsidy support from residential consumers to the industrial sector.

The proposal was presented during public hearings convened by the National Electric Power Regulatory Authority (Nepra) in response to a petition submitted by the Power Division. The proceedings were chaired by Nepra Chairman Waseem Mukhtar, with detailed briefings delivered by officials of the Power Division and the Power Planning and Monitoring Company. Notably, no representative appeared on behalf of the over 28.5 million residential consumers who would be directly impacted by the proposed fixed charges.

Under the revised structure, fixed monthly charges are proposed to apply, for the first time, to both protected and non-protected domestic consumers, including households consuming up to 300 units per month. Previously, such charges were limited to non-protected consumers exceeding the 300-unit threshold.

The proposed fixed charges would range between Rs200 and Rs675 per kilowatt per month, calculated on the basis of sanctioned load rather than actual consumption. By way of illustration, a consumer with a 2kW sanctioned load at Rs200 per kW would incur a monthly fixed charge of Rs400, whereas a 5kW load at Rs500 per kW would result in a Rs2,500 monthly obligation. A 6kW sanctioned load at Rs675 per kW would attract a monthly charge of Rs4,050.

For protected consumers, a fixed charge of Rs200 per month has been proposed for usage up to 100 units and Rs300 for up to 200 units. Subsidy allocations for these slabs would be curtailed by Rs51 billion, reducing total subsidy support to Rs423 billion.

In respect of non-protected consumers, proposed fixed charges stand at Rs275 per month for up to 100 units, Rs300 for up to 200 units, and Rs350 for up to 300 units. Subsidy withdrawals include Rs29 billion from the first two slabs and Rs21 billion from the 201–300 units category.

For consumption between 301 and 400 units, the fixed charge is proposed to increase from Rs200 to Rs400. Consumers in the 401–500 units bracket would see an increase from Rs400 to Rs500, while those consuming up to 600 units would face an increase from Rs600 to Rs675.

At higher consumption levels, fixed charges for up to 700 units would be reduced by Rs125 to Rs675, while consumers exceeding 700 units would benefit from a Rs325 reduction, similarly bringing their charge to Rs675.

Officials have indicated that the revised fixed charge regime is expected to generate approximately Rs101 billion annually, earmarked to subsidise industrial electricity tariffs. The restructuring aims to reduce industrial power tariffs by up to Rs4.04 per unit to enhance competitiveness.

In parallel, per-unit tariff reductions have been proposed for various consumption brackets. Consumers using 400 units would receive a reduction of Rs1.53 per unit, those up to 500 units would benefit from a Rs1.25 per unit decrease, and users of 600 units would receive a Rs1.40 per unit reduction.

For consumers using 700 units, the proposed relief amounts to 91 paisa per unit, while those exceeding 700 units would receive a reduction of 49 paisa per unit.

Nepra is expected to render its determination upon completion of stakeholder consultations and regulatory review.