Electricity Bills to Fall As NEPRA Reduces Power Tariff

The National Electric Power Regulatory Authority (NEPRA) has reduced the base electricity tariff by Rs. 1.49 per unit to Rs. 34.01/unit for FY2025-26, down from Rs. 35.50/unit in FY25. The cut is driven by reduced capacity payments after renegotiations with IPPs, lower energy prices, and a projected 2.8 percent rise in demand, reported a national daily. NEPRA has approved a revenue requirement of Rs. 3.52 trillion for ex-WAPDA distribution companies (XWDiscos), comprising Rs. 3.07 trillion in power purchase price (PPP) and Rs. 454 billion for distribution margins and losses. Last year, the government raised the base tariff by Rs. 5.72/unit. This year’s reduction is expected to ease pressure on consumers and businesses. However, imported coal plants will operate at only 24 percent capacity in FY26 but cost Rs. 61.43/unit due to high dollar-linked returns (27.45 percent). Of the Rs. 3.07 trillion PPP, Rs. 1.94 trillion (63 percent) is allocated to capacity charges and Rs. 1.13 trillion to energy and O&M. This equates to Rs. 6,484/month per MW of average demand (24,943 MW). The average PPP for XWDiscos before losses is Rs. 26.34/unit, with Rs. 16.67/unit in capacity and Rs. 9.67/unit in energy costs. Including K-Electric, the national average PPP is Rs. 25.98/unit.