- Govt aims collecting Rs132bn per year from domestic consumers.
- Plans to slash per-unit tariffs by up to Rs1.53 for calendar year 2026.
- Restructuring will shift Rs101bn in subsidies away from households.
ISLAMABAD: The federal government plans to collect an additional Rs132 billion a year from domestic electricity consumers by imposing new fixed monthly charges, while reducing per-unit tariffs by up to Rs1.53 for calendar year 2026, The News reported on Wednesday.
The move marks major restructuring that will shift Rs101 billion in subsidies away from households and toward the industrial sector.
The proposal was presented as the National Electric Power Regulatory Authority (Nepra) opened hearings on a wide-ranging overhaul of power tariffs. For the first time, fixed charges will apply to both protected and non-protected domestic consumers, a move aimed at cutting cross-subsidies and lowering industrial electricity tariff by up to Rs4.04 per unit.
The hearing was held on a petition filed by the Power Division and is chaired by Nepra Chairman Waseem Mukhtar. Officials from the Power Planning and Monitoring Company (PPMC) briefed the regulator on the new tariff structure.
Under the plan, fixed charges will now apply to households consuming up to 300 units per month, including protected consumers. Previously, only non-protected users consuming more than 300 units paid fixed charges.
For protected consumers, the government has proposed a fixed charge of Rs200 per month for those using up to 100 units and Rs300 for those using up to 200 units. As a result, subsidies for these two slabs have been reduced by Rs51 billion, bringing total subsidy support down to Rs423 billion.
For non-protected consumers, the proposed fixed charges are Rs275 per month for up to 100 units, Rs300 for up to 200 units and Rs350 for up to 300 units. The government has withdrawn Rs29 billion in subsidies from the first two slabs and another Rs21 billion from the 201 to 300 units category.
Higher consumption levels will also face changes. Fixed charges for users consuming 301 to 400 units will rise to Rs400 from Rs200. Those using 401 to 500 units will pay Rs500 instead of Rs400. Consumers using 600 units will see fixed charges increase to Rs675 from Rs600.
However, some relief is proposed for heavy users. Fixed charges for those consuming up to 700 units will be reduced by Rs125 to Rs675. Consumers using more than 700 units will see a bigger cut of Rs325, also bringing their fixed charge to Rs675.
Overall, the new fixed charges are expected to generate Rs101 billion annually. This amount will be used to subsidise the industrial sector, which officials say is crucial for economic recovery.
Alongside fixed charges, the government has proposed cuts in per-unit electricity rates for households. Consumers using 400 units will get a relief of Rs1.53 per unit. Those using up to 500 units will see a cut of Rs1.25 per unit. For 600 units, the reduction will be Rs1.40 per unit.
Consumers using 700 units will get a cut of 91 paisa per unit, while those using more than 700 units will receive a reduction of 49 paisa per unit.
The Power Division said the goal is to rationalise tariffs, reduce cross-subsidies and shift the financial burden away from industry.
Nepra is expected to announce its final decision after completing consultations with stakeholders.
Solar policy under scrutiny
Meanwhile, the federal power minister has defended the changes in solar net-metering changes as Senate defers resolution on rooftop solar rules.
The government, during Senate session,, faced sharp criticism from treasury and opposition members after the Nepra a day earlier drastically changed the terms for all existing and future net-metered solar consumers.
A resolution moved by Senator Dr Zarqa Suharwardy Taimur regarding net metering licensing was rejected. While debating the resolution, government allies and opposition members argued that if the intent was to abolish net metering, then why was it initiated in the first place. They stated that the public was promised benefits for installing solar panels, and that Nepra only formulates policies directed by the government.
The government tried to defend the move, which has effectively terminated the existing net-metering regime and replaced it with net-billing for all. Federal Minister for Power Division, Sardar Awais Leghari, stated that the difference between net metering and billing was not outlined in the contract. He assured that they have pledged to achieve 60% clean energy in the electricity mix by 2030, and that currently, 55% clean energy is already being achieved.
Speaking on a motion in the House, PTI parliamentary leader Senator Syed Ali Zafar strongly criticised the government’s decision to withdraw net-metering benefits for solar consumers, calling it a grave breach of trust and a cruel act against the people of Pakistan.
The opposition legislator called the decision “the most cruel act of the government” and insisted it was akin to throwing a bomb into the already burdened lives of Pakistani citizens, who are struggling with soaring electricity bills and economic hardship.
He questioned how the government could expect foreign investment when it failed to honour commitments made to its own people. Ali Zafar challenged the government to prove its sincerity by making a clear commitment to withdraw the decision.
The government, he underlined, made a solemn commitment to the people, urging them to invest for their own benefit and for the future of Pakistan, while assuring that issues with independent power producers (IPPs) would be addressed as citizens shifted to self-generation through solar power.
“Acting on this assurance, people across the country invested heavily in solar panels, and families diverted their life savings, sold assets, and even took loans, which they are still repaying, to install solar systems,” he stressed.
Senator Ali Zafar pointed out that solar energy is now present in nearly every household, commercial building and agricultural operation. Despite this, the government abruptly turned around and sought to cancel its commitment retrospectively.
He called the retrospective withdrawal a grave injustice and noted that under established law, the doctrine of promissory estoppel (a legal doctrine allowing enforcement of a promise lacking formal consideration to prevent injustice) applied.
Expressing her views, PPP parliamentary leader in the Senate Sherry Rehman said that Nepra’s decision was beyond understanding, noting the middle class was asking why the government provided incentives for solar power in the first place if this decision was to be taken.
She wondered,”How can you do this to your country and citizens, who are being affected the most by climate change? The problems lie with the distribution system; what message is being sent to investors by changing tariffs again and again? You have made electricity bills an instrument through which various taxes are being imposed”.
Govt defends net metering policy change
Power Minister Leghari defended the move and contended that Nepra was within its remit to do so and that it had been done to take the burden off consumers. He insisted: “Changing regulations according to the law and the Constitution is a regulator’s job. This is not policy; there should be clarity on that”.
“The Solar Association of Pakistan, whose bread and butter is installing and investing in these systems, conveyed to us that what the government is doing is not just necessary, but without it, public interests could not be saved.”
He continued that the solar association warned that up to 95% of people would suffer”greater damages and increased burdens. They said in June, don’t do this now, wait at least five or six months and carry out a proper transition.”
The minister also said that while PTI Senator Ali Zafar spoke about retrospective effects, there were none in this regulation, remarking, “I am proud to say that in this regulation, our regulator did not reverse one clause on these contracts”.
He also maintained that there were no 20-year contracts, saying it was a seven-year contract, and until it expires, nobody in this country has dared to insert new terms and conditions. Nepra has not done this either.
Leghari noted that of the over 30 million consumers, 466,506 have net-metering and that these consumers have put 7,000 megawatts (MW) of electricity on net-metering.
“Other than these consumers, there are 30.04m who live in flats or slums, where they cannot install solar systems, or they cannot afford them. If Nepra allowed electricity to be bought at these rates, then the 30.04m consumers — who are the true public — would have to shoulder a Rs200 billion burden left by net-metering consumers, which would increase to Rs550 billion,” he noted.
He also assured that nothing would happen to the existing contracts of the 466,000 consumers, but that these regulations are for future consumers. “What we are saying is that we will buy electricity from you based on the average rate of the grid,” he explained, noting that consumer regulations are evolving.
The federal minister opposed the resolution on net metering by Senator Dr Zarqa Suharwardy. At the time of the resolution’s vote, no PTI member was present in the House. The House rejected the resolution. Following this, the Senate session was adjourned until 3pm on Thursday.
