NEPRA proposes big cut in electricity prices for winter

The National Electric Power Regulatory Authority (NEPRA) has prepared a formula and handed over the recommendations to the government to cut electricity price by Rs20 per unit under three-month winter package.

NEPRA proposed reducing electricity prices through the “Balance of Tariff” method. This strategy involves revising capacity payments, lowering surcharges, and improving operational efficiency to decrease costs.

Currently, electricity costs Rs45.06 per unit. This includes Rs17.01 for capacity charges, Rs15.28 for taxes and surcharges, and Rs3.10 for distribution margins. Additionally, 1 paisa per unit is collected for repairs, revenue adjustments, and future adjustments, while transmission charges are Rs1.37 per unit. The net generation cost of electricity stands at Rs7.62 per unit.

According to NEPRA’s report, removing Rs7.52 in surcharges and Rs0.67 in adjustments could lower the price to Rs25.20 per unit. Eliminating all additional charges could further reduce the rate to Rs20.04 per unit, offering significant financial relief to consumers.

In November 2024, the Ministry of Water and Power introduced a Winter Electricity Relief Package to encourage higher electricity usage during winter. This package provides a flat discount of Rs26.07 per unit on additional consumption compared to the previous year. The relief plan is applicable for three months, from December 2024 to February 2025.

These initiatives aim to make electricity more affordable while addressing inefficiencies and eliminating unnecessary charges that contribute to high tariffs.