The National Electric Power Regulatory Authority (NEPRA) has provisionally raised the incremental electricity consumption rate for industrial and agricultural consumers from Rs22.98 to Rs25.30 per unit, effective for the November 2026 billing cycle, exposing a deepening rift over the government’s inability to accurately assess the actual marginal cost of power generation.
The regulatory decision, finalized on November 6, 2026, allows the Incremental Consumption Package (ICP) to continue at the elevated rate while the Ministry of Energy (Power Division) compiles a long-delayed, verifiable technical assessment of generation costs. The ruling applies to eligible consumers of ex-WAPDA distribution companies (XWDISCOs) and K-Electric.
The Authority was sharply divided on the package’s continuation. NEPRA Members Amina Ahmed (Tariff and Finance) and Engineer Maqsood Anwar Khan (Development) filed formal dissenting notes, demanding the scheme’s immediate, temporary suspension until the Power Division could present a genuinely cost-reflective tariff calculation.
“NEPRA clarified that the provisional rate did not constitute a final determination of actual marginal cost attributable to incremental consumption, nor did it establish that Rs25.30 per unit represented the actual cost of serving incremental demand during any historical month.”
Chairman Waseem Mukhtar broke the deadlock, utilizing his casting vote to approve the rate hike and maintain the package. In an additional note, Mukhtar argued against immediate suspension, opting to grant the Ministry a final opportunity to submit the repeatedly requested data, while issuing a stern warning regarding inter-agency coordination.
The original ICP, approved in December 2025 for a three-year term, charged eligible industrial and private agricultural consumers Rs22.98 per kWh on consumption exceeding their December 2023 to November 2024 baseline. The mechanism was designed to incentivize grid utilization and deter industrial migration to captive power generation.
The regulator explicitly rejected a Ministry proposal to apply the Rs25.30 rate retroactively from October 2026, citing that the billing cycle was already substantially completed. Any bills issued for November 2026 prior to this notification must be adjusted in subsequent cycles.
The review process laid bare significant procedural failures within the Ministry of Energy. NEPRA noted that the Power Division failed to complete the first mandatory semi-annual review, initially requested in June 2026. Subsequent submissions in July and September were rejected as incomplete or lacking required marginal cost assessments and stakeholder consultation.
Instead of complying with data requests, the Ministry petitioned NEPRA in September to conduct the review itself. Following an October hearing attended by the Power Planning and Monitoring Company (PPMC), the Independent System and Market Operator (ISMO), and other stakeholders, the Ministry eventually proposed the Rs25.30 rate on October 23, based heavily on updated fuel prices within the originally assumed generation mix.
NEPRA rejected the premise that the original generation mix—which the PPMC modeled on a 50/50 split of spot and contracted Qatar RLNG—remained representative under altered fuel availability and dispatch economics. Initial NEPRA analysis, incorporating ISMO data, indicated that the actual marginal cost at the consumer end spiked to Rs42.01 in April 2026 and Rs49.65 in May 2026, averaging a notional Rs29.65 over the review period.
This discrepancy means the cost differential between the actual marginal cost and the fixed Rs22.98 package rate was effectively absorbed by non-beneficiary consumers through Fuel Cost Adjustments (FCA). Stakeholders have demanded this differential be clawed back from package beneficiaries.
In their dissent, Ahmed and Khan stressed that the package was intended to be strictly cost-reflective. They argued that the new Rs25.30 rate lacked a “credible linkage” to actual costs and that the Rs29.65 calculated average actually exceeded standard off-peak tariffs, undermining the incentive entirely.
NEPRA has now mandated the Power Division to submit comprehensive, PLEXOS-based modeling reconciling generation dispatch, fuel availability, and FCA workings by November 25, 2026, with final data due by December 3. Failure to comply, Chairman Mukhtar warned, could trigger the package’s termination and legal proceedings against non-compliant entities.
| Key Figures & Entities Involved | Role |
| Waseem Mukhtar | Chairman, NEPRA |
| Amina Ahmed | Member (Tariff and Finance), NEPRA |
| Engineer Maqsood Anwar Khan | Member (Development), NEPRA |
| Ministry of Energy (Power Division) | Federal Government Body |
| PPMC | Power Planning and Monitoring Company |
| ISMO | Independent System and Market Operator |