Electricity prices may drop by up to Rs12 per unit: minister

Negotiations with K-Electric are underway to address excessive multi-year tariffs.

Federal Minister for Energy, Awais Leghari, announced that ongoing talks with the International Monetary Fund (IMF) could result in a reduction of electricity rates by as much asRs10 to 12 per unit.

Speaking to the media at the Parliament House, Leghari revealed that renegotiations with Independent Power Producers (IPPs) have already saved the country Rs1,100 billion, with those savings benefiting the general public through lower electricity prices.

The minister added that the government is now focusing on revisiting agreements with state-owned power plants, a move that is expected to lead to additional savings for consumers. “We are bringing 15 more IPP contracts to the cabinet for review, and we expect even more savings for the public,” he said.

Leghari also commented on the ongoing issue with K-Electric, which is demanding a large sum under its multi-year tariff.

“We believe this tariff is unjustified and should be lowered. NEPRA will make a decision that serves the interests of the people,” he said.

Regarding efforts to curb electricity theft, particularly in Khyber-Pakhtunkhwa (K-P), Leghari explained that despite numerous meetings with the provincial government, progress had been slow. “Our company faced additional losses of Rs6 billion due to continued theft and lack of cooperation,” he stated.

Looking ahead, the minister confirmed that discussions with 16 other IPPs are ongoing, with the goal of revising contracts to further reduce electricity costs. He also mentioned that government power plants would soon undergo a review of their return on equity, which could further influence future tariffs.

Power tariff slashed by 75 paisa

The National Electric Power Regulatory Authority (Nepra) recently reduced electricity tariff up to 75 paisa per unit for consumers of ex-Wapda power distribution companies (DISCOs) and K-Electric on account of fuel charges adjustment (FCA).

The power-sector regulator cut tariff up to Rs0.7556 per unit for DISCOs due to variations in fuel charges in November 2024.

For K-Electric consumers, it slashed the power price by Rs0.4919 per kilowatt-hour (kWh) for October 2024. The reimbursement on account of tariff reduction will be made in electricity bills for January 2025.

Discussing a tariff application of DISCOs, the regulator said that National Transmission and Despatch Company (NTDC) reported provisional transmission and transformation (T&T) losses of 244.158 gigawatt hours (GWh), equivalent to 2.946%, based on energy delivered to the NTDC system during November 2024.

Additionally, NTDC reported T&T losses of 19.528 GWh, or 3.391%, for Pak Matiari-Lahore Transmission Company's (PMLTC) high-voltage, direct-current line.

NTDC is allowed T&T losses of 2.639% at 500-kilovolt and 220kV levels. For PMLTC, the permitted T&T losses are up to 4.3%.

Accordingly, for November 2024, the T&T losses of 263.686 GWh were verified for the NTDC system at 500kV and 220kV networks and for PMLTC, keeping them within permissible limits. These losses were included in the monthly FCA calculation.