Power firms seek to recover Rs34b from consumers

Of this collection, a hefty sum comprises capacity charges for idle plants

ISLAMABAD:

Despite a revision in agreements between the government and independent power producers (IPPs), capacity payments still continue to haunt end-users as power distribution companies (DISCOs) have called for passing on the burden of Rs34 billion to consumers, mainly on account of capacity charges.

These payments will be made to those idle power plants, which have not been running and have remained closed, but the consumers paying bills regularly will be forced to provide a hefty amount for adjustment in the second quarter of 2026.

Quetta Electric Supply Company (Qesco) has come out of the vicious cycle of capacity payments after all agricultural tube wells in Balochistan adopted solar energy. Additionally, Multan Electric Power Company (Mepco) has almost 50% of tube wells on its system and a major proportion has switched to solar power, causing a marked decline in sales during the period under review.

At a public hearing conducted by the National Electric Power Regulatory Authority (Nepra), all DISCOs informed the regulator that their sales in the domestic sector had dropped significantly due to solarisation. On the occasion, the representatives of DISCOs acknowledged that they were enforcing load-shedding in the night because they could not provide expensive electricity to consumers at lower rates.

The government has shelved the old policy of solar net metering to prevent consumers from shifting to solar energy. In the new policy, it has scrapped the exchange of units and has switched to net billing. Despite such a plan to bar consumers from adopting solar power, all representatives of DISCOs revealed that their electricity sales in the domestic sector had declined.

A representative of Faisalabad Electric Supply Company (Fesco) said that they had registered a 5% dip in sales due to solarisation. However, he claimed that electricity consumption by the industry jumped up 2%. He admitted that they were enforcing load-shedding on the consumers paying bills regularly despite the decrease in demand. A representative of Islamabad Electric Supply Company (Iesco) said that they sold 303 units less during the period under review and admitted that a major proportion of adjustment was on account of capacity payments. She also acknowledged that solarisation had resulted in the decline in sales.

Representatives of the industry rejected any increase in electricity rates and warned that tariff hike during the regional war would put more burden on the industries.

Member Nepra said that the country would have suffered worst load-shedding had there been no solarisation in the residential sector. He mentioned that DISCOs were resorting to power outages during night hours due to solarisation. He dismissed the notion that electricity sales were being pulled down by solarisation.

DISCOs sought total adjustment of Rs33.778 billion for the second quarter (April-June) of calendar year 2026. The request included Rs46.380 billion in capacity charges, Rs4.974 billion in variable operation & maintenance charges and Rs3.080 billion on account of impact of transmission and distribution losses on monthly fuel cost adjustments. These positive adjustments were partly offset by Rs13.517 billion under the use-of-system charge and Rs21.175 billion due to the impact of the incremental consumption package. In addition, Rs14.231 billion was claimed as unrecovered costs of small power producers (SPPs) and captive power plants (CPPs).

Among individual DISCOs, Sukkur Electric Power Company sought the highest net adjustment of Rs13.724 billion, followed by Peshawar Electric Supply Company at Rs6.294 billion, Fesco Rs5.358 billion, Mepco Rs5.090 billion, Gujranwala Electric Power Company Rs4.992 billion, Iesco Rs4.872 billion, Lahore Electric Supply Company Rs2.953 billion and Hazara Electric Supply Company Rs1.239 billion. In contrast, Tribal Areas Electric Supply Company showed a negative adjustment of Rs4.394 billion, Qesco Rs3.647 billion and Hyderabad Electric Supply Company Rs2.083 billion.