The National Electric Power Regulatory Authority (NEPRA) is considering changes to a discounted electricity package for industrial and agricultural consumers after the government raised concerns that the existing tariff no longer covers the rising cost of power generation.
The Power Division has asked the regulator to review the incremental consumption package, which currently offers eligible consumers electricity at Rs22.98 per kilowatt-hour. The scheme applies to industrial and private agricultural consumers served by former WAPDA distribution companies as well as K-Electric.
NEPRA held a public hearing on Monday to examine the government’s review request. The package covers additional electricity consumption during both peak and off-peak periods for consumers operating under Time-of-Use and Non-Time-of-Use tariffs.
The Power Division said the scheme was approved in December 2025 and was initially designed to remain in place for three years. However, officials argued that the cost of supplying additional electricity has risen well above the fixed tariff.
According to the government’s data, the weighted average marginal cost between December and May was Rs27.58 per unit. After accounting for system losses, the average increased to Rs31.83 per unit.
The gap widened further in April and May. The marginal cost reached Rs36.71 per unit in April and Rs33.98 in May, while the loss-adjusted costs stood at Rs42.37 and Rs39.22 per unit respectively.
The government has warned that the difference between the actual cost and the subsidised package rate is effectively being recovered from other electricity consumers unless the regulator approves an adjustment.
The scheme also includes a mechanism for review when combined industrial and agricultural electricity consumption rises more than 25% above the baseline. Consumption growth crossed that threshold in January and February and reached 34.81% in April.
The Power Division has questioned whether the package should continue while marginal electricity prices remain significantly higher than the subsidised rate. It said the six-month weighted average marginal cost was around Rs32 per unit during the latest review period.
Several participants at the hearing called for changes to the scheme. One intervener proposed revising the tariff in line with actual marginal costs from June 2026 and recovering the difference from beneficiaries.
Another participant criticised the package for increasing the cross-subsidy burden on domestic and commercial consumers. He argued that the arrangement was benefiting a limited number of large users while shifting additional costs to other consumers.
NEPRA will decide whether to increase the package tariff, suspend the scheme or allow it to continue under revised conditions. The decision is expected to determine the future of the discounted electricity incentive for industrial and agricultural consumers.
