NEPRA reserves ruling on tariff

Petition highlights increased reliance on costly imported LNG and coal

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ISLAMABAD:

The National Electric Power Regulatory Authority (Nepra) on Thursday reserved its judgement on a request for increase in electricity rates up to Rs1.27 per unit on account of fuel charges adjustment (FCA) for April 2025.

Nepra held a hearing to consider the tariff hike plea submitted by the Central Power Purchasing Agency Guarantee Limited (CPPA-G). The hearing was chaired by Nepra chairman and attended by the representatives of CPPA-G, officials of the Ministry of Energy, business community members, journalists and members of the public.

According to Nepra, CPPA-G had filed a request for a tariff hike of Rs1.268 per unit under the FCA for April. If approved, the increase will be applicable for one month only.

The proposed adjustment will apply to all consumers of power distribution companies (DISCOs), excluding lifeline consumers, pre-paid meter users and electric vehicle charging stations. Nepra also stated that the adjustment would not be applicable to K-Electric consumers.

The regulator emphasised that it carefully heard the views of all relevant stakeholders. It will now conduct further scrutiny of the data before issuing a detailed decision.

According to the CPPA-G petition, the actual fuel cost borne during April was Rs9.9197 per kilowatt-hour (kWh) while the reference cost – used for billing consumers – was Rs7.6803 per kWh. The difference of Rs1.2685 per unit is now sought to be recovered from consumers.

In its request, CPPA-G stated that a total of 10,513 gigawatt hours (GWh) of electricity was generated in April, of which 10,196 GWh – nearly 97% – was supplied to DISCOs while the rest was lost in transmission.

Data revealed that power generation in the month under review remained heavily reliant on costly imported fuels. Over 20% of electricity was generated by using imported liquefied natural gas (LNG) at an extremely high cost of Rs24.26 per unit. The electricity produced from imported coal also proved expensive, costing Rs16.60 per unit.

While the share of hydroelectric power was relatively significant at 21.94% and nuclear power contributed 17.91% at a low cost of Rs2.10 per unit, these cheaper sources were unable to offset the impact of expensive fuel-based generation.

Local coal accounted for 14.51% of the generation at Rs11.21 per unit and gas-based power added another 8% at Rs11.82 per unit. Power generation from furnace oil, though minimal at just 0.79%, was the costliest, being recorded at Rs28.77 per unit.

The petition highlighted a small quantity of power  — around 0.31% – imported from Iran, which came at a high cost of Rs25.35 per unit. No generation was recorded from high-speed diesel, which is typically reserved for emergency use due to its high cost.

The proposed tariff increase, if approved, will be reflected in the electricity bills of millions of consumers, excluding lifeline users.