ISLAMABAD: The National Electric Power Regulatory Authority (Nepra) on Tuesday admonished the Power Division for attempting to rush through approval of its proposed discounted electricity package for industrial and private agricultural consumers without prior consultation.
“You are compromising your case by seeking instant regulatory approval. This is unfair to the regulator and those who make payments,” said Nepra’s Sindh Member (Technical), Rafique A. Shaikh, during a public hearing led by Nepra Chairman Waseem Mukhtar. His remarks came after a Power Division team, headed by Additional Secretary Mehfooz Bhatti, sought immediate approval so that the new rates could be reflected in the current month’s electricity bills.
The government’s package proposes a rate of Rs22.98 per unit for incremental consumption — nearly double the base rate of Rs11 per unit — in an effort to revive industrial activity, boost demand, and reduce blackout risks without additional fiscal burden.
Industrialists Reject “Unattractive” Package
Representatives from the Federation of Pakistan Chambers of Commerce and Industry (FPCCI) and the All Pakistan Textile Mills Association (Aptma) criticised the proposed package, calling the discounts of Rs2–6 per unit on additional usage “insufficient”.
They demanded that the base tariff be brought down to 9 cents per unit and that cross-subsidies be abolished, pointing out that regional competitors such as Bangladesh, Vietnam, and India offer rates ranging between 4 and 9 cents per unit.
Government officials, however, said the package had been approved by the federal cabinet after extensive consultations. “The industry is free to take it or leave it. The package is not subject to change,” an official remarked.
Regulator Questions Policy Consistency
During the hearing, Nepra officials expressed concern that rushed approvals undermine regulatory transparency and stakeholder confidence. The Power Division defended the move, citing the need to stabilise the national grid amid growing solar penetration — now estimated at 6,035MW in net-metering and 12,000MW in off-grid capacity.
When asked about conflicting solar policies between the federal and provincial governments, Bhatti avoided a direct answer, saying only that the federal government supports Punjab’s solar tubewell initiative.
Industrial representatives also cautioned that the new package could be ineffective due to rising quarterly and monthly tariffs, which have already pushed industrial electricity costs from Rs34 to Rs38 per unit.
Falling Demand and Policy Objectives
According to the Power Division, industrial electricity demand has fallen by 14% and agricultural demand by 47% amid economic adjustments and the shift toward alternative energy. Previous incentive programs — such as the Industrial Support Package (2020–23) and the Bijli Sahulat Package (Dec 2024–Feb 2025) — had successfully boosted industrial consumption by 7–14%.
The new three-year plan applies to industrial and private agricultural consumers of DISCOs and K-Electric, covering both peak and off-peak incremental usage. Positive Fuel Cost Adjustments (FCAs) will be applicable, while Quarterly Tariff Adjustments, Debt Service Surcharges, and negative FCAs will be excluded from incremental units.
If incremental consumption exceeds 25% above the baseline, rates will be reviewed semi-annually to ensure cost recovery. The scheme will be terminated if two consecutive reviews indicate revenue shortfalls.
Benchmark consumption rules will apply to new industrial consumers and Captive Power Plants, while only industrial and private agricultural categories will qualify for the scheme.
Despite criticism, the Power Division maintains that the plan will encourage higher industrial and agricultural consumption, improve asset utilisation, and stabilise the grid — all while remaining fiscally neutral.
Story by Khaleeq Kiani
