Islamabad: The National Electric Power Regulatory Authority (NEPRA) has completed the public hearing on the federal government’s proposed winter electricity package for fiscal year 2025, which aims to deliver significant savings to domestic and industrial consumers.
The Winter Electricity Package aims to stimulate increased electricity consumption during the traditionally low demand winter months by offering significant discounts to domestic and industrial consumers. A detailed decision from NEPRA on the package is expected soon.
The hearing, chaired by NEPRA Chairman Wasim Mukhtar, reviewed the FY2025 winter demand initiative, which has already been approved by the Economic Coordination Committee (ECC). The initiative, effective from December 2024 to February 2025, is designed to be subsidy neutral and focus on maximizing the use of the system’s generating capacity while minimizing gas consumption.
The winter electricity package, which targets industrial, domestic and commercial users, offers discounts on additional electricity use compared to the same period last year.
As per the key benefits for power consumers under the winter package, discounts for domestic consumers will range between 30 percent (Rs 11.42 per unit) for minimum additional usage and 50 percent (Rs 26 per unit) for higher usage. Moreover, discounts for industrial consumers will range between 18% (Rs 5.72 per unit) for minimum additional usage and 37% (Rs 15.05 per unit) for higher usage. However, the initiative caps consumption increases at 25% compared to the previous year and excludes solar consumers (net metering), drawing criticism from stakeholders.
The Department of Energy confirmed that the package, designed using advanced simulation tools such as Plexos software, complies with system construction constraints. The package will also be available to K-Electric (KE) consumers under the same conditions applied to power distribution companies (DISCOs).
During the hearing, representatives of the Central Guaranteed Power Purchasing Agency (CPPA-G) explained that only positive fuel cost adjustments (FCA) would apply to incremental consumption, and the debt service surcharge (DSS) would not apply. They also stressed that the initiative is expected to be cheaper than alternative energy sources such as liquefied petroleum gas or LNG-based heating.
Several industry representatives, including Arif Bhilwani, Tanveer Bari and Rehan Jawad, raised concerns over the exclusion of net metering consumers and the 25% cap on additional consumption. Rehan Jawad challenged the government’s claims on savings, pointing out that the real savings may only range between Rs. 4 and Rs. 4.5 per unit, in contrast to the CPPA-G’s estimate of Rs. 5.72 to Rs. 15.05 per unit.
Tanveer Bari stressed that previous packages had not equally benefited Karachi’s industries. He urged the government to ensure that the industrial sector in Karachi gets the same benefits as other regions. CPPA-G officials argued that net metering consumers already enjoy exemptions from capacity fees, and including them would strain finances.
NEPRA has emphasized its commitment to balancing affordability with effective energy sector reforms. Stakeholders were invited to submit written comments, which will be reviewed alongside further data analysis before a final decision is issued. NEPRA aims to ensure that the package achieves its objectives of providing relief to consumers while stabilizing power demand during the winter.
The winter demand initiative is expected to increase electricity consumption by up to 16% over its three-month duration, which could reduce dependence on imported fuel and boost industrial productivity. However, stakeholders warned that delays in implementation or unaddressed exceptions could undermine its effectiveness.
It is worth noting that the Winter Demand Initiative, approved by the Economic Coordination Committee (ECC) on 19 November 2024, is support-neutral and will be in effect from December 2024 to February 2025. This Winter Demand Initiative is intended for industries, domestic – time of use (ToU) and non- ToU – Consumers exceeding 200 units, commercial and public utility consumers of Distribution Energy Distribution Companies (DISCOs) and K-Electric ostensibly to enable optimal utilization of system generation capacity In addition to reducing the demand for gas due to the favorable demand shift towards electricity. The winter demand initiative is expected to increase consumption by up to 16 percent.
Although the Winter Demand Initiative is designed to be subsidy-neutral and focused on encouraging increased electricity use during the traditionally low demand winter months (December to February), NEPRA previously stated, in a letter to the Department of Energy , that the increase in electricity consumption under the scheme could raise fuel duty to over Rs. 26 per unit.
While the initiative offers great potential for relief and system efficiency, concerns from industrial and solar consumers underscore the need for more comprehensive policies. The upcoming decision will be crucial to determine the effectiveness of the package in supporting Pakistan’s energy sector and its consumers.