The proposed rules would allow federal and provincial governments to introduce standalone electricity systems in selected areas, with public consultation open for 30 days.
Islamabad, October 27, 2026: The National Electric Power Regulatory Authority (NEPRA) has proposed new regulations to introduce standalone electric power systems through pilot projects, targeting areas with high distribution losses, poor service quality, low bill recovery or locations where extending the electricity network is not economically justified.
Under the draft NEPRA Standalone Electric Power System (Pilot Projects) Regulations, 2026, the regulator has invited public comments within 30 days of publication. Feedback may be submitted to the NEPRA Registrar.
The proposed framework would allow the federal or a provincial government, with the consent of the relevant distribution licensee, to notify a scheme for a standalone power system within a designated area. Such systems would comprise generation facilities, with or without energy storage, and associated electrical infrastructure, without a direct or indirect connection to the national or provincial grid.
Pilot projects limited to two per licensee
The draft proposes limiting pilot projects to two per licensee, unless NEPRA approves a higher number at the request of a sponsoring government.
Each scheme would need to specify its objectives, geographical coverage, technology, implementation timeline, funding arrangements, expected public benefits and safety measures. It would also have to address consumer consultation, ownership, operation and maintenance, service standards, complaint handling and arrangements for reconnecting an area to the distribution network if the scheme is discontinued.
The draft states that standalone systems would be funded wholly or partly by the sponsoring government through grants, subsidies or other financial resources. Their costs would not be included in a licensee’s revenue requirement for tariff determination.
Government to bear reconnection costs
If an area later requires reconnection to the distribution network, the sponsoring government would bear the costs of restoring, reinstalling or upgrading network facilities. These expenses could not be recovered from consumers through electricity tariffs.
Implementing agencies would be required to meet applicable technical and safety standards, while charges levied on consumers would be restricted to those specified in the approved scheme. The draft also requires the protection of consumers’ personal data.
Performance review and licensing changes
Implementing agencies would have to report to NEPRA three months after a scheme begins, covering implementation progress, consumer satisfaction, administrative feasibility and system reliability. NEPRA would assess each pilot project after one year.
The draft further requires licensees to submit proposed licence modifications within 30 days of the regulations coming into force. Licensees would also need to address existing network assets, outstanding arrears and implications for their businesses, including any pending privatisation transactions.
The regulations are proposed for immediate commencement once finalised. The framework remains a draft open to public feedback and should not be treated as final regulations.