99.96% vs 23
the share of customers absorbing the 2026 tariff move · vs the 23 HV industrials consuming 88% of domestic power
Doubled For The Many, Untouched For The Few
Low Voltage would rise from Nu 2.66/kWh to an unsubsidised Nu 5.73/kWh — a +115% jump. The 23 HV1 industrials sit at Nu 1.60/kWh today; even the proposed +75% leaves them below the cheapest legacy export PPA (Tala Rs 2.12) and a fraction of PHPA-II's reference rate.
The 2025–28 proposal
Two numbers from the tariff filing
In December 2025, the Bhutan Power Corporation filed its 2025–2028 tariff application under Section 11 of the Electricity Act. The Low Voltage rate — the band that covers households, small businesses, hotels, restaurants, schools, and roughly every electricity customer with a meter under 250 kVA — would move from Nu 2.66/kWh to an unsubsidised Nu 5.73/kWh, a +115% jump (the final consumer rate, after the government subsidy still to be approved, would be lower).
The High Voltage Tier 1 (HV1) rate — the 23 largest industrial customers in the country, almost all cement-and-ferro-alloy plants — would rise by a smaller 75%, from Nu 1.60/kWh toward Nu 2.80; and because the two-part tariff’s demand charge falls at the same time, the all-in HV1 bill stays roughly flat — and stays the cheapest electricity in the country.
The 23 industrials consume 88% of domestic electricity. The 99.96% Low Voltage cohort consumes roughly 10%.
The arithmetic of the gap
The HV1 tariff sits below the cheapest legacy export
The structural feature that makes the 2026 revision particularly visible is the HV1 tariff’s position relative to the country’s own export PPAs.
Nu 1.60 / kWh
what the 23 HV1 industrials pay today · the all-in bill barely moves under the proposal
Rs 2.12 / kWh
the Tala PPA · the cheapest legacy export tariff Bhutan sells electricity to India at
Rs 2.55 / kWh
the Mangdechhu PPA · the newer Mangdechhu export reference
Rs 5.10 / kWh
the PHPA-II reference rate · the most recent commissioned export tariff
Nu 5.73 / kWh
the proposed unsubsidised LV rate · what 99.96% of customers would pay · 3.6× the HV1 rate
A Bhutanese cement factory pays less per unit of electricity than the company in Assam buying the same kWh from Bhutan does. Under the proposal the Bhutanese household would pay roughly 3.6× more than the cement factory next door.
The political-economy story
Why the revision lands the way it does
The country’s energy story has, since the 1980s, rested on a national framing: hydropower is the country’s collective endowment, the electricity generated is the country’s shared inheritance, and the equitable allocation of that inheritance — to households, to enterprises, to schools, to clinics — is part of what makes Bhutanese hydropower different.
A tariff revision that more than doubles the household rate while leaving the largest industrial users essentially insulated reads — fairly or not — as the inverse of the redistribution the country has historically prided itself on.
The revision is internally consistent. The cost-recovery arithmetic supports it. Distribution losses, the lean-season import bill, the depreciation on the BPC network — all of these have to be recovered, and the LV band is the residual claimant. The arithmetic is not the question. The political-economy reading is.
The lean-season interaction
Where the cross-subsidy becomes a cash loss
The tariff asymmetry compounds with another structural feature of the system — the lean-season import dependence. From December through April, Bhutan’s run-of-river generation drops to 25–35% of nameplate capacity, while peak demand has nearly quadrupled since 2020. The shortfall is bought from India through the Indian Energy Exchange.
1,102 GWh
2025 lean-season electricity imports from India · purchased at IEX clearing prices around Nu 4–6 per kWh
BPC buys these lean-season kWh at roughly Nu 4–6/kWh and resells them to the 23 HV1 industrials at Nu 1.60/kWh. That is, on every imported kWh sold to a domestic industrial customer, the system runs a cash loss of roughly Nu 2.40–4.40.
The annualised loss runs at USD 33–44 million of foregone revenue, growing toward USD 60–80 million by 2028 if neither tariff nor pumped-storage build-out moves.
What happens next
Where the revision either narrows or hardens
Bhutan’s Electricity Act mandates a tariff revision every three years. This one is not yet settled: as of mid-2026 the Prime Minister had sent the application back to the ERA for an affordability review, no final determination had been issued, and the current Nu 2.66/kWh LV rate remained in force. The control period runs to 2028.
By the time it is settled, three forces will have shifted the ground under it:
Pumped storage
the 1,800 MW Gongri-Jericho project may have moved from DPR to construction · lean-season import dependence narrows
Domestic load growth
EV adoption + GMC build-out + heating-electrification all expanding LV demand · the LV cohort grows in absolute size
Export PPAs
PHPA-II's full-year operation may have lifted the export-tariff weighted average · the HV1-vs-export gap closes from above
Policy attention
the proposed LV tariff jump has already put cross-subsidy on the public agenda · the political-economy frame is the open question
The next tariff determination is where the cross-subsidy either narrows toward a sensible household-vs-industrial ratio — or hardens into the long-term structural feature it has been since the country’s industrial-tariff policy was first set.