The National Electric Power Regulatory Authority (Nepra) has introduced a sweeping new regulatory framework for electricity distribution companies, dismantling performance rules that had governed the sector for nearly two decades. The Nepra Performance Standards (Distribution) Regulations, 2026, known as PSDR 2026, replace the Performance Standards (Distribution) Rules, 2005, and establish a far broader system for evaluating how power distributors operate.
Under the new framework, distributors will no longer be assessed solely on electricity supply. The regulations expand the scope to include service reliability, consumer facilities, investment levels, safety protocols, and the adoption of emerging technologies. This marks a fundamental shift in how the regulator intends to monitor and enforce performance across the country’s power distribution network.
Measurable Indicators and Technology Integration
PSDR 2026 introduces a suite of measurable indicators covering the frequency and duration of power outages, restoration times, handling of consumer complaints, electricity quality, load-shedding practices, safety standards, investment targets, digitalisation efforts, and the integration of distributed energy resources. The framework also addresses infrastructure for electric vehicle charging, cybersecurity, and transparency, reflecting a wider approach towards monitoring the performance of distribution companies.
A key feature of the new regulations is the introduction of Guaranteed Performance Standards, which focus on services directly experienced by consumers. These include specific requirements for restoring electricity after outages and resolving complaints within defined timeframes. Distribution companies will also be required to inform consumers in advance about planned power interruptions. Industrial and captive power consumers will face additional requirements regarding outage notifications and updates on restoration.
Consumer Compensation and Localised Accountability
For the first time, the regulations provide for compensation in specified cases where guaranteed performance standards are not met. This gives consumers a direct remedy when prescribed service obligations are breached, shifting some of the financial burden of poor service back onto the distribution companies.
Nepra will also be able to assess performance at different operational levels, including the company, circle, division, and sub-division. This granular approach is intended to help identify areas where service delivery remains weak instead of relying solely on overall company-level performance figures. PSDR 2026 also brings load-shedding under a more structured regulatory framework and introduces a wider set of benchmarks for monitoring electricity distribution.
The new rules mark a significant departure from the framework introduced in 2005, placing greater emphasis on measurable performance, consumer rights, technological development, safety, and accountability. The effectiveness of the new regulations will ultimately depend on their implementation and whether they lead to more reliable electricity supply and improved services for consumers across the country.
