Electricity Tariff: NEPRA Approves Revised Incremental Package at Rs25.30 per Unit

The National Electric Power Regulatory Authority (NEPRA) has approved the continuation of the Incremental Consumption Package (ICP) at a revised rate of Rs25.30 per unit, up from Rs22.98, despite opposition from two members who questioned whether the tariff accurately reflected the actual cost of supplying additional electricity.

NEPRA Chairman Waseem Mukhtar supported the continuation of the package through his casting vote, alongside Member (Law) Ghulamullah Shaikh, according to a report by Business Recorder.

However, Member (Tariff and Finance) Amina Ahmed and Member (Development) Engineer Maqsood Anwar Khan dissented, arguing that the revised tariff lacked a credible link to the actual marginal cost of additional electricity supply.

In their dissenting opinion on NEPRA’s November 6, 2026 decision, the two members recommended temporarily suspending the package until the Power Division submitted a comprehensive review backed by verifiable cost calculations.

Approved by the federal cabinet in November 2025, the package was introduced to encourage additional electricity consumption, bring industrial demand back to the national grid and utilise idle power generation capacity.

Under the scheme, consumers using incremental electricity were required to pay a tariff covering at least the actual marginal cost of supplying the additional power. The condition was intended to ensure that other consumers would not bear the resulting financial burden. The package also required a mandatory review every six months.

However, the dissenting members said the Power Division failed to submit the required review after the first six-month period ended on May 31, 2026. Despite repeated requests from NEPRA, the ministry initially provided incomplete information and subsequently asked the regulator to conduct the review itself.

NEPRA’s tariff team calculated the weighted average marginal cost of incremental electricity at approximately Rs31.83 per unit. The figure was later reduced to Rs29.65 after partial adjustments.

The dissenting members maintained that neither calculation represented a reliable cost determination because essential information on generation constraints, regasified liquefied natural gas (RLNG) costs and system modelling remained unavailable.

They also questioned the Power Division’s proposed rate of Rs25.30 per unit, saying it was based on an assumed generation mix and updated fuel prices rather than actual marginal costs during the review period.

The members warned that continuing the package without verified cost calculations could shift additional costs to consumers outside the scheme through fuel cost adjustments and quarterly tariff adjustments.

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They said incremental electricity consumption could increase the system’s average fuel cost, while incremental units were excluded from quarterly tariff adjustments. This could leave other consumers bearing a larger share of the resulting costs.

Industrial consumers also raised objections to the review process. Rehan Javed, Aamir Sheikh and Arif Bilwani said they had not been consulted, despite an earlier NEPRA direction requiring consultations.

They questioned the pricing methodology and called for broader reductions in electricity tariffs instead of preferential consumption packages.