NEPRA hears plea to cut tariffs by Rs0.65/unit

Public questions govt on industrial power rates, petroleum levy; relief likely for all DISCO consumers

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ISLAMABAD:

Consumers are expected to get relief of Rs0.65 per unit in electricity bills for June 2025 under fuel charges adjustment (FCA).

The National Electric Power Regulatory Authority (NEPRA) held a public hearing on Wednesday on a request by the Central Power Purchasing Agency (CPPA) to reduce the FCA for June. CPPA sought a reduction of Rs0.6541 per unit due to lower fuel costs. The reference cost was Rs8.3341 per kilowatt-hour (kWh), while actual cost turned out to be Rs7.6800/kWh.

During the hearing, private sector participants raised concerns about the federal government's failure to fully pass on the notified tariff to industries and consumers. They questioned why the Rs1.71 per unit relief, linked to the petroleum levy, was not reflected in electricity bills. No response came from the Ministry of Energy, which was absent from the hearing. NEPRA also offered no explanation for the ministry's non-participation.

One participant questioned why NEPRA had notified the federal government about the petroleum levy being transferred to electricity consumers, while still not reducing tariffs. An industry representative claimed that the industrial tariff has risen again to Rs35 per unit, worsening the cost of doing business int he country.

Another stakeholder raised the issue of cheap gas supply to the Jamshoro power plant, arguing that the supply should be diverted to more efficient plants like Halmore or Quaid-e-Azam. CPPA responded that the gas could not be shifted to other plants due to dedicated pipeline infrastructure.

On the issue of increasing the base tariff for bagasse-based power plants, a participant argued that bagasse is a by-product of sugar mills and questioned why these plants were given coal-equivalent rates. NEPRA's case officer replied that bagasse is a rich and efficient energy source. The tariff hike was not special treatment but related to previous outstanding payments.

In another query, participants asked about the status of the Neelum-Jhelum hydropower project. NEPRA was informed that the project will remain out of the national grid for two more years.

CPPA told the regulator that 13.31 billion units of electricity were sold in June. The actual generation cost stood at Rs7.68 per unit compared to a reference cost of Rs8.33. The reduction in fuel costs, across all sources, means consumers may receive over Rs8 billion in relief for June.

The NEPRA chairman directed officials to brief power distribution companies (DISCOs) about the impact of circular debt. He asked for monthly data on loan defaults from DISCOs. Officials said the data was not available during the hearing but would be submitted. The chairman also instructed that full statistics from all DISCOs be presented during the next quarterly adjustment hearing on August 4.

If approved, the proposed Rs0.65 per unit reduction will apply to all DISCO consumers, excluding lifeline users, for one month.

According to CPPA-G data, a total of 13,744 GWh of electricity was generated in June. Hydropower contributed the highest share at 39.36%, followed by RLNG at 16.12%, local coal at 10.99%, imported coal at 10.16%, and nuclear at 10.06%. The costliest energy came from imported Iranian electricity at Rs22.5155/kWh, while solar energy was supplied at no cost.

After accounting for 2.97% transmission losses and adjustments, 13,310 GWh were delivered to DISCOs at an average cost of Rs7.68/kWh.

NEPRA has invited all concerned stakeholders to submit written or oral objections under the law. Full details, including CPPA's request and relevant documents, are available under NEPRA's regulations.