ISLAMABAD : The private sector stakeholders have approached National Electric Power Regulatory Authority (NEPRA), seeking few days time for preparing comprehensive response to the Federal Government’s Motion on uniform electricity tariff across the country.
The plea written by Rehan Jawed, Chairman Ogra and Nepra Standing Committee, Korangi Association of Trade and Industry, says that the proposal has been prepared without consultation with industrial stakeholders and appears to be structured in a manner that will further discourage industrial consumption. As a result, stakeholders have been given extremely limited time—barely one working day—to review the proposal and identify anomalies.
He has requested that the hearing be extended by at least 3 to 4 days to allow for a thorough technical and financial review, adding that it is critical that any distortions or disincentives be addressed with the objective of increasing industrial consumption, thereby helping to offset fixed capacity charges.
According to letter, at present, industrial consumption accounts for only 26.07% of the national load—far below the optimal level of at least 40% that is necessary for a balanced and sustainable power sector which by no means has been considered in current consumer end tariff.
Key Structural Concerns and Recommendations ;(i) the current method applies 25% fixed charges on the highest MDI recorded over the past 60 months. This approach is unjust, especially for industries that have downsized or closed units. A more accurate and fair basis would be to use the maximum MDI of the last 12 months to align fixed charges with actual operations ;(ii) bulk consumers who install their own infrastructure—transformers, LT panels, cabling—are still charged higher per unit rates than B2 consumers. For reference: – B2 off-peak: Rs 27.41/unit – B3: Rs 28.24/unit – B4: Rs 27.96/unit This is an anomaly. Since bulk consumers absorb their own transformer losses and reduce burden on DISCO infrastructure, their unit price should be at least Rs 2 lower than B2. Additionally, it must be noted that in most B2 connections, the meter is located after the transformer, meaning transformer losses are borne by the utility. In contrast, in B3 and B4 connections, the meter is installed before the transformer, and the consumer bears transformer losses, including those of cables, panels, and other equipment. These consumers also invest significantly in infrastructure including RMUs, HT/LT panels, transformer procurement and maintenance—all of which reduce system burden and improve network efficiency. Therefore, the current tariff design inadvertently penalizes efficiency and private investment in infrastructure. To promote bulk metering and disincentivize proliferation of multiple B2 connections within industrial premises, B3 and B4 tariffs should be logically structured to remain below B2, by at least Rs 2/unit ;(iii) Peak hour tariffs have become punitive and counterproductive. Many industries shut operations during these hours, which ironically reduces DISCO revenues. We recommend capping peak rates at Rs 2 above off-peak, encouraging round-the-clock industrial use ;(iv) any incentive on incremental electricity usage should be aligned with the real-time marginal cost—calculated as the daily or monthly average—rather than a flat per-unit rate. This approach better reflects actual system conditions, encourages efficiency, and ensures cost-reflective pricing ;(v) most industrial meters already support 3-slot ToD functionality. We propose: – 8 AM to 3 PM: Lowest rate (aligning with lowest marginal generation cost) – Evening/mid-slot rates adjusted accordingly. This change only requires meter reprogramming and will encourage load during economically favorable hours ;(vi) if net metering buy-back rates are to be revised downward, the 1 MW cap on industrial solar export should be lifted. This allows DISCOs to procure cheaper electricity and improve their average cost of supply while promoting clean energy ;(vii) new industrial connections or load enhancements should be processed within 60 days. If grid upgrades are needed, DISCOs should invest under their MYT framework, ensuring long-term returns rather than penalizing applicants ;(viii) industries should be differentiated based on operational hours and allowed to choose whether they want higher fixed charges or lower variable charges. Those running 24 hours should not face the same fixed and variable charges as those running single or double shifts. This will enable more accurate cost recovery and prevent disincentivizing continuous production ;(ix) over 5.3 GW of residential net metering capacity is being cross-subsidized by industrial and non-net-metered users. Industry proposes fixed charges for residential net metering to be applied per kW of sanctioned load, not per connection. Amazingly they are being paid at napp which includes capacity charges as well as fuel charges and they are not eligible for both ; and (x) in many two-storey houses, multiple single-phase meters are used to exploit the 200-unit subsidy slab. Industry suggests that the third meter onward be charged at flat PPP-based tariff, or – provide cash-based direct subsidies through social programs for genuinely needy consumers, decoupled from consumption.
According to Rehan Jawed this motion strictly pertains to uniform consumer-end tariffs. It does not cover the issue of uniform Fuel Cost Adjustment (FCA) for Discos and K-Electric, which is determined through a formula-based mechanism and applied against a specifically approved fuel cost reference. For example Nepra has finalized FCC reference of Rs 15.99 in supply MYT determination on May 27, 2025 till new FCC reference is approved. Any modification to the FCA structure will require new approved FCA references and its uniformity across the country would require a separate motion, explicitly approved by the Federal Cabinet—a condition that is not met under the current motion. Furthermore, any such modification, even if approved by Federal Cabinet, can only be applied prospectively and not retrospectively, as reinforced by the Supreme Court in the Anoud Power Generation Ltd. case (PLD 2001 SC 340), which clearly established that tariff changes must follow the principle of prospective application.
After explaining technical considerations and broader implications, industry has once again urged NEPRA to grant an extension of 3 to 4 days for stakeholders to submit meaningful feedback, hoping under leadership of incumbent Chairman NEPRA , the Authority will continue to uphold the principles of transparency, efficiency, and stakeholder consultation in all tariff-related proceedings. Ends
