Price Hike Warning: Consumers Brace for Higher Bills as NEPRA Hikes Use of System Charges by 119%

The National Electric Power Regulatory Authority (NEPRA) has approved a massive Rs. 332.3 billion revenue requirement under the three-year Use of System Charges (UoSC) framework, driving a substantial hike in transmission tariffs starting August 2026.

The revised pricing structure will trigger a projected consumer-end tariff increase of approximately Rs. 1 per unit. This mechanism allows the newly designated National Grid Company Pakistan Limited (NGC) to recover critical expenses tied to network operations, transmission line maintenance, and structural system upgrades.

Key Adjustments and System Impacts

• 119% Surge in System Charges: The average UoSC rate is escalating from the previous Rs. 235.30 per kilowatt per month to a new average of Rs. 515.75/kW/month.

• August Peak Tariff: For the fiscal year 2024–25, the fixed UoSC rate will climb to Rs. 710.25/kW/month, effective from August 1, 2026, through July 31, 2027, before adjusting downward to Rs. 520.29/kW/month the following year.

• Targeted Recovery: While the total three-year revenue requirement stands at Rs. 332.3 billion, the net collection target has been adjusted down to roughly Rs. 112 billion after accounting for Rs. 219.4 billion in revenues already recovered between 2023 and 2025.

Economic Concerns and Operational Directives

The steep upward adjustment in transmission costs has drawn sharp criticism from prominent business forums and industrial bodies. Stakeholders, including the All Pakistan Textile Mills Association (APTMA), have voiced intense concern that the pricing surge threatens industrial competitiveness. They warn that higher input costs could suppress domestic productivity, drive manufacturing operations off-grid, and accelerate the commercial pivot toward localized solar PV installations.

In its final decision, NEPRA has directed the National Grid Company to utilize these recovered funds to aggressively resolve persistent network bottlenecks, expedite delayed transmission projects, and optimize the integration of upcoming green energy resources—such as hydel, wind, and solar power—into the national grid.