Draft regulations would allow government-sponsored standalone electricity pilots in designated high-loss, remote or uneconomic areas, with proposed limits on project numbers, funding rules, licence-boundary changes and consumer safeguards. This briefing describes the consultation proposal and does not treat it as an enacted regulatory duty.
The proposed regulatory mechanism
NEPRA listed the draft Standalone Electric Power System (Pilot Projects) Regulations, 2026 on 24 October 2026, with a public consultation under section 47(3) of the Regulation of Generation, Transmission and Distribution of Electric Power Act, 1997. This is a proposed regulatory framework, not an operative licence modification or a final set of binding regulations.
The object is to test standalone electric power systems in parts of a distribution company's service territory where conventional distribution has persistently high technical or recovery losses, poor service, remoteness, or uneconomic network maintenance. The proposed programme is limited in scope and is not a general licence for any private supplier to operate an off-grid network.
Limits, sponsorship and financial responsibility
Under the published description of the proposal, the federal or relevant provincial government would sponsor and fund a standalone scheme. A distribution licensee could host up to two pilots, with further projects requiring NEPRA's permission. The draft does not itself fix a universal loss or recovery percentage that automatically qualifies an area.
The sponsor would bear pilot costs rather than moving the scheme's expenditure into the host distributor's revenue requirement. If the territory were later reconnected to the network, the sponsor would also bear the reconnection expense under the draft mechanism. Governments and financiers therefore need a lifecycle cost estimate, not simply capital expenditure at launch.
Service territories and consumer safeguards
The proposed approach would identify a particular geographic area and remove it from the host distribution licence and supplier-of-last-resort territory, subject to the required legal process and licence modification. This is material for existing concession and distribution rights and should not be misunderstood as a unilateral power to alter current licence boundaries without the draft scheme being finalised.
A key consumer sequencing protection is that the existing supply connection should not be disconnected until the standalone system has been installed. The draft would also require technical information and an implementation plan, because the proposed framework does not dictate one technology for every location. Continuity of supply and safety should be examined at project design stage.
Monitoring, consultation and consequences
The published proposal contemplates a progress report after three months and an authority review of pilots after a year. It may therefore create a structured test of reliability, economics and consumer outcomes before any wider programme is considered. Sponsor departments, distributors and equipment providers should test metering, consumer complaints, technical access, failure response and procurement responsibilities in advance.
The consultation was announced in October with comments requested within 30 days of publication. The original NEPRA notice and draft should control the actual submission instructions and deadline. A legal briefing must not describe proposed territory changes, funding responsibilities or consumer arrangements as already binding; those consequences depend on final regulations, individual schemes and regulatory approval.
Implications if the framework is adopted
Distribution licensees should assess proposed territorial exclusions and operational impacts. Government sponsors should examine pilot funding, technical procurement, customer continuity and reconnection liabilities. All parties must review the final notification and project-specific approvals before changing existing supply arrangements.
Official source: NEPRA News — consultation listing. Comparative coverage: Business Recorder report on the draft's proposed clauses. The legal effect depends on the signed final instrument.
Energy and infrastructure practice · Legal Insights
General research information, not case-specific advice.