Govt Announces New Electricity Tariff Structure with Increased Rates

The Power Division has announced a new electricity tariff structure, raising the basic electricity tariff by Rs5.72.

This adjustment request has been submitted to the National Electric Power Regulatory Authority (Nepra), with a public hearing set for 2pm on July 8.

According to the new tariff structure, the revised rates took effect on July 1, 2024, regardless of when Nepra issues the official notification. The new rates will affect all units of electricity consumption, starting from the first unit.

For household consumers, the minimum rate is set at Rs23.73 per unit. For those using 200 units continuously over six months, the tariff will be Rs26.11 per unit.

Here are the new incremental rates for various levels of electricity consumption:

Electricity Tariffs and Monthly Bills

Lifeline Users (1-50 units):
- Tariff: Rs 3.95 per unit
- Monthly Bill: Rs 200-300
Lifeline Users (51-100 units):
- Tariff: Rs 7.74 per unit
- Monthly Bill: Up to Rs 1,000
Protected Consumers (100-200 units):
- Tariff: Rs 10 per unit
- Monthly Bill: Around Rs 2,500 (including monthly and quarterly adjustments)
Non-Protected Consumers:
- 201-300 units:
  - Tariff: Rs 27-30 per unit (including taxes)
  - Monthly Bill: At least Rs 6,000
- 301-400 units:
  - Tariff: Rs 38 per unit (including taxes)
  - Monthly Bill: Rs 15,000-17,000
- 401-500 units:
  - Tariff: Rs 42+ per unit (including taxes)
  - Monthly Bill: Above Rs 21,000
- 501-600 units:
  - Monthly Bill: Around Rs 30,000
- 601-700 units:
  - Monthly Bill: More than Rs 35,000
- Above 700 units:
  - Monthly Bill: At least Rs 50,000

Commercial consumers will face a rate of Rs41 per unit, industrial consumers will pay Rs30 per unit, and agricultural consumers will benefit from a reduced rate of Rs22.85 per unit.

The Power Division stated that these adjustments aim to minimize the impact on poorer households, with an increase of less than 2% for 16.8 million or 58% of such households. However, more affluent consumers might see an average increase of 9% in their monthly bills.

To mitigate these changes, the government has allocated a subsidy of Rs440 billion. As the economy improves, it is anticipated that electricity rates could decrease by an average of 3% by January 2025 compared to June 2024 levels.

The announcement also mentions the issuance of fixed charges due to the 75% fixed cost of the power sector. This move reflects the Power Division’s commitment to stabilizing the power sector and supporting domestic industries by reducing their burden by Rs150 billion.

Stakeholders are encouraged to participate in the upcoming Nepra public hearing to provide feedback before the official notification of the revised electricity prices is issued.

This change highlights the government’s efforts to balance economic needs with consumer affordability, while ensuring sustainable development in the energy sector.