No increase in electricity rates in Bihar; Relief to 22.2 crore consumers

In doing so, the Commission rejected the proposal of 35 paise per unit tariff increase in energy charges across all categories of both the distribution companies (discoms) – North Bihar Power Distribution Company Limited (NBPDCL) and South Bihar Power Distribution Company Limited (SBPDCL).

“The proposal of the discoms to increase the energy tariff by 35 paise per unit across all consumer categories has not been accepted… There will be no increase in the electricity tariff rate in the next financial year starting from April 1. This order will remain effective till March 31 next year or the next tariff order of the Commission, whichever is earlier,” Subhani told reporters after announcing the tariff order in the presence of the full commission.

Additionally, about 2.7 million consumers, which is about 12% of the total electricity consumers in the state, will get additional relief as the electricity regulator has decided to merge its tariff slabs for DS-II (urban domestic consumers), NDS-I (rural commercial users) and NDS-II consumers (urban commercial consumers) into a single slab, keeping the energy tariff of the existing lower slab for each category. This will result in effective reduction in tariffs (in terms of energy charges) ₹Rs.1.53 per unit for DS-II (Urban Domestic Consumers), ₹0.42 per unit for NDS-I (Rural Commercial Users) and ₹Rs.1.20 per unit for NDS-II (Urban Commercial Consumers).

The new system will replace the previous system of different rates for different slabs (1-100 units and above 100 units).

At present, pre-subsidy flat rate is charged from DS-I (Domestic Rural Consumers) ₹7.42 per unit, while DS-II consumers (urban domestic consumers) are charged in two slabs. For the first 100 units, they pay a pre-subsidy rate ₹7.42 per unit and ₹Rs 8.95 per unit for energy consumption above 100 units. Similarly, NDS-I consumers (rural commercial users) pay pre-subsidy rate ₹7.79 per unit up to 100 units and ₹Rs 8.21 per unit on consumption above 100 units. NDS-II consumers (urban commercial consumers) pay pre-subsidy rate ₹7.73 per unit for first 100 units and ₹Rs 8.93 per unit on consumption above 100 units. But now, both the slabs have been merged into a single category, thereby retaining the existing lower slab’s energy tariff for each category. Its purpose is to make billing more transparent and easier to understand.

Subhani also said that consumers will continue to benefit from the concessions and discounts announced in the tariff rate of the current year (2025-26).

In a relief to traders and businessmen, the Commission reduced the prescribed tariff for NDS-II (for contract load up to 0.5 kW sub-category) from the existing one. ₹Rs 200 per connection per month ₹Subhani said, Rs 150 per connection per month.

It also reduced the existing tariff for LTIS-I (Low Tension Industrial Service Rural Consumer) category ₹288/KVA per month ₹278/kVA per month and existing charges for LTIS-II (Low Tension Industrial Service Urban Consumer) category ₹360/KVA per month ₹He said, Rs 350/KVA per month.

The Commission fixed the distribution loss trajectory for 2026-27 at 11.97% for NBPDCL and 15.91% for SBPDCL.

The tariff announced by BERC on Wednesday does not include the subsidy that the state government announces every year. At present, the state government provides a subsidy of per unit ₹Rs 4.97 for DS-I (Domestic Rural Consumers) at BERC approved rate ₹7.42, by reducing the effective energy charge ₹2.45 per unit.

Similarly the state government also gives subsidy ₹In case of DS-II (Domestic Urban Consumer) Rs. 3.30 for the first 100 units at the rate approved by BERC. ₹7.42, by reducing the effective energy charge ₹4.12 per unit. There is a per unit subsidy on energy consumption above 100 units. ₹Rs 3.43 on BERC approved tariff ₹8.95 per unit, thereby reducing the effective tariff ₹5.52 per unit.

For NDS-I (Rural Commercial Users), the government subsidy is ₹4.44 per unit for the first 100 units, thereby reducing the effective tariff rate per unit. ₹Rs 3.35 against BERC approved rate ₹7.79 per unit. There is a per unit subsidy on energy consumption above 100 units. ₹4 against the rate approved by BERC ₹8.21, reducing the effective tariff rate ₹4.21 per unit.

NDS-II consumers (urban commercial consumers) get government subsidy ₹2.06 per unit for first 100 units and ₹2.49 for energy consumption above 100 units, less the effective rate. ₹5.67 more ₹6.44 per unit for the first 100 units and energy consumption beyond 100 units respectively.

The government is likely to announce subsidies on electricity tariff rates for the next financial year 2026-27 in the next few days, when the effective per unit tariff rate will be known.

Additionally, the state government provides 125 units of free electricity to the state’s 18.6 million domestic electricity consumers, leading to monthly savings. ₹Every urban consumer gets a saving of Rs 550, while other consumers in rural areas who consume up to 125 units get a saving. ₹ 306 per month. Free electricity is being provided under the Chief Minister Electricity Consumer Assistance Scheme.

The regulator also allowed the discom’s proposal to include mushroom cultivation (except processing and manufacturing with mushrooms) under the agriculture category of consumers in the financial year 2026-27.

This move will help small farmers engaged in mushroom cultivation as the tariff rates applicable to agriculture will now be applicable on it.

Cultivation under this provision will include all methods of cultivation including the use of air conditioners or other power-driven gadgets used exclusively for mushroom cultivation.

Mixed response from industries:

Bihar Industries Association (BIA) president Ram Lal Khaitan said BERC has not increased the per unit electricity tariff for different categories of consumers, but the industry was expecting a reduction in tariffs this year. He reminded that three years ago, consumers faced a huge and unexpected increase in tariffs, which continues to burden them.

Khaitan highlighted that during the public hearing, BIA had strongly advocated for passing on the benefits of improved financial performance of power discoms to consumers through lower tariffs, including benefits from lower transmission and distribution losses. However, these expectations have not been met in the current order.

Sanjay Bhartiya, chairman of the BIA’s energy committee, expressed concern over the persistently high kilovolt-ampere (KVA) tariffs, which had almost doubled three years ago and remained unchanged despite no incentive support from the government.

“We had expected a rational reduction in KVA charges especially to support industrial consumers. The absence of such relief has caused considerable disappointment in the industrial sector,” he said.

Despite these concerns, BIA welcomed several positive steps taken by BERC, including rejecting proposals for a steep increase in KVA charges by up to 85% and placing a cap on incentives for online bill payments – both of which were opposed by BIA during the public consultation process.

BIA also appreciated the merger of DS-II and NDS-I and NDS-II consumer categories into a single slab while retaining the lower slab energy tariff. The move is expected to provide effective tariff relief of approx. ₹1.53 per unit for DS-II, ₹0.42 per unit for NDS-I, and ₹Rs.1.20 per unit for NDS-II consumers.

Additionally, BIA welcomed the reduction in fixed charges for industrial categories, which also reduced LTIS-I charges. ₹From Rs 288/KVA/month ₹Rs.278/KVA/month and LTIS-II charges reduced ₹From Rs 360/KVA/month ₹Rs.350/KVA/month.

BIA recommended that similar rationalization and slab-merger measures should also be extended to high tension (HT) consumer categories to ensure comprehensive relief in industrial areas.

Khaitan expressed hope that BERC and the state government may revisit the tariff order and take further steps to reduce the financial burden on consumers, especially industries, to support economic growth and competitiveness in Bihar.