Govt seeks Nepra nod for three-year Rs 22.98/kWh power incentive for industry, agriculture

ISLAMABAD: The Power Division has filed a motion with the National Electric Power Regulatory Authority (NEPRA) seeking approval for a three-year incremental consumption package priced at Rs 22.98 per kilowatt-hour (kWh) for industrial and agricultural consumers.
NEPRA will conduct a public hearing on November 11, 2025, to review the federal government’s proposal.
According to Power Division, over the past three years, electricity demand across major consumer categories has witnessed a noticeable contraction, reflecting broader macroeconomic adjustments, structural changes in consumption patterns, and increased adoption of alternative supply options such as net metering (6,035 MW). The decline has been particularly pronounced in the industrial and agricultural sectors, where consumption has reduced by 14% and 47% respectively. Demand reduction leads to a vicious cycle where underutilization of system –assets further increases the tariff due to under recovery of fixed cost.
Historically, the government has consistently implemented targeted initiatives to stimulate demand and enhance system utilization. The Industrial Support Package (Nov 2020-Oct 2023) resulted in a 14%’increase in industrial sales, while the Bijli Sahulat Package (Dec 2024-Feb 2025) recorded industrial growth of 6.9%, 2.7%, and 10.2% over three consecutive months— demonstrating the efficacy of well-designed incentives in sustaining consumption and supporting the productive sectors. Industrial and agricultural consumers, in particular, are well positioned to contribute to grid stability without additional infrastructure strain, given their scalable and controllable demand that aligns with surplus generation hours, particularly during daytime solar hours, and delivers significant value addition in output, revenues, and employment.
Considering the above, the Federal Government has approved the incremental consumption package for industrial and agriculture electricity consumers for DISCOs and K- Electric on November 05, 2025 and it was decided that policy guidelines be issued to NEPRA for approval and incorporation of proposed initiative in the regulatory framework.
The general provisions of policy initiative are listed below: (i) rate of Rs 22.98 per unit shall be applicable to industrial and private agricultural consumers, including both Time-of-Use (Toll) and Non-ToU categories, of DISCOs and K-Electric, on- their peak and off-peak incremental consumption over the corresponding reference period. The reference months for determining incremental consumption shall be from December 2023 to November 2024 ;(ii) the proposed package shall remain effective for a period of three years from ‘^the date of approval. The package will apply on billing month basis. The scheme will automatically expire upon completion of this period ;(ii) the package shall be subsidy neutral for both XW-DISCOs and KE consumers. Positive Fuel Cost-Adjustments (FCAs) shall be applicable to eligible consumers on incremental consumption. Further, Quarterly Tariff Adjustments (QTAs), Debt Service Surcharge (DSS) and negative FCAs shall not be applicable on incremental consumption for eligible consumers ;(iv) if incremental consumption of the industrial and agriculture sectors in aggregate exceeds 25% growth above the baseline, a review of the incremental price and scheme will automatically be triggered to pass on additional marginal cost ;(v) semi-annual reviews will take place to ensure continued cost-revenue alignment, with the marginal tariff adjusted as necessary. The scheme will be terminated immediately if upward tariff adjustments are required for two consecutive reviews; (vi) any losses incurred under this scheme, arising from the shortfall between revenues and tariffs, will be duly considered and adjusted during the semi-annual reviews.
Power Division is of the view that the instant motion is being filed by the Federal Government pursuant to Sections 7 and 31 of the Act, read with Rule 17 of the NEPRA (Tariff Standards and Procedure) Rules, the Authority is requested to incorporate the Cabinet-approved incentive package, within the applicable tariff adjustment mechanism and tariff structure to facilitate its implementation in accordance with the approved policy framework.