NEPRA proposes Rs20 per unit cut in electricity prices under winter package

ISLAMABAD: In a recent development, National Electric Power Regulatory Authority (NEPRA) has finalized a formula which will cut down the electricity rates by Rs20 per unit, as proposed under a three-month winter package.

According to NEPRA, there is the method of “Balance of Tariff” through which it is possible to decrease electricity rates by revising capacity payments and surcharges. The authority has also recommended the improvements of the operational inefficiencies for bringing down power costs. 

The current electricity price is Rs45.06 per unit, which is divided into several heads. Capacity charges amount to Rs17.01 per unit, taxes and surcharge to Rs15.28 per unit, and distribution margins collected by electricity distribution companies amount to Rs3.10 per unit. 

In addition, 1 paisa per unit is collected for repair, revenue collection, and future adjustments, while transmission charges  amount to Rs1.37 per unit. Average net generation cost of electricity: Rs7.62 per unit.

If the surcharges of Rs7.52 and adjustments of 0.67 rupees per unit are removed, the electricity price would reduce to Rs25.20 per unit. 

Moreover, if these charges are eliminated, the current electricity rate of Rs45.06 per unit could be reduced to Rs20.04 per unit. This reduction in electricity prices is expected to provide relief to consumers during the winter season.

Earlier in November 2024, the Ministry of Water and Power announced a relief package for the winter season through electricity. Under this package, consumers will have to pay only up to Rs26 and 7 paisa per unit for extra consumption of electricity against last year‘s consumption.

 It is a flat rate discount scheme, and consumers will be given this relief facility for three months of the winter season, starting from December 2024 to February 2025.