Electricity Bills to Drop as NEPRA Cuts Power Tariff

The decrease occurred cause of lowered capacity payments following revised agreements with Independent Power Producers (IPPs), declining fuel costs, and an estimated 2.8% hike in consumption.

Islamabad, June 25, 2025: The National Electric Power Regulatory Authority (NEPRA) has cut the base electricity rate by Rs. 1.49 per unit, setting it at Rs. 34.01/unit for the fiscal year 2025–26, compared to Rs. 35.50/unit in FY25.

The decrease occurred cause of lowered capacity payments following revised agreements with Independent Power Producers (IPPs), declining fuel costs, and an estimated 2.8% hike in consumption, according to a leading national publication.

NEPRA has sanctioned a total revenue demand of Rs. 3.52 trillion for the ex-WAPDA distribution firms (XWDiscos), including Rs. 3.07 trillion in power procurement charges (PPP) and Rs. 454 billion allocated for distribution overheads and inefficiencies.

In the previous fiscal year, the government had hiked the base tariff by Rs. 5.72/unit. The current year’s drop is seen as a relief measure for households and commercial consumers.

READ MORE: NEPRA Approves KAPCO Tri-Partite Power Purchase Deal

Nonetheless, electricity plants operating on imported coal will run at merely 24% capacity in FY26, while still costing Rs. 61.43/unit due to significant dollar-indexed returns (27.45%).

Out of the Rs. 3.07 trillion PPP, Rs. 1.94 trillion (63%) has been earmarked for capacity-related payments, and Rs. 1.13 trillion for energy procurement and operational & maintenance expenses. This equals Rs. 6,484/month per MW for the average projected load (24,943 MW).

READ MORE: NEPRA Reviews KE’s Utility-Scale Solar Projects

The mean PPP for XWDiscos, prior to factoring in system losses, stands at Rs. 26.34/unit — broken down as Rs. 16.67/unit for capacity and Rs. 9.67/unit for fuel-related expenses. When K-Electric is included, the nationwide average PPP comes to Rs. 25.98/unit.