Staff Report
ISLAMABAD: Power Distribution Companies (DISCOs) in Pakistan have submitted a request to the National Electric Power Regulatory Authority (NEPRA) to approve a power price hike that would impose an additional burden of Rs 8.71 billion on consumers across the country. The application for this increase, filed by major DISCOs including Faisalabad Electric Supply Company (FESCO), Gujranwala Electric Power Company (GEPCO), Islamabad Electric Supply Company (IESCO), Lahore Electric Supply Company (LESCO), Multan Electric Power Company (MEPCO), Peshawar Electric Supply Company (PESCO), Quetta Electric Supply Company (QESCO), Sukkur Electric Supply Company (SEPCO), and Tribal Areas Electricity Supply Company (TESCO), pertains to the first quarterly adjustment of the 2024-25 fiscal year, covering July to September.
A NEPRA hearing to review this proposal is scheduled for November 20. If approved, the increased charges would directly impact electricity bills for millions of consumers, including those served by K-Electric.
The breakdown of the proposed charges includes several components aimed at covering essential costs for the DISCOs. The largest portion, Rs 8.06 billion, is designated for capacity charges. These charges compensate power plants for being available to generate electricity, even if not actively producing it, ensuring that sufficient capacity is maintained in the system to meet demand spikes.
Additionally, the DISCOs have requested Rs 1.25 billion to cover operations and maintenance costs. These funds are needed for ongoing infrastructure upkeep, enhancing reliability, and maintaining the power network, which helps to reduce outages and support consistent supply to consumers.
The proposal also includes Rs 1.65 billion allocated for system charges and market operations fees. These costs cover the operation of the grid system and support activities such as administrative and logistical expenses to keep the power supply chain functional. Collectively, these requests reflect the financial needs of the distribution companies to ensure stable grid operations and prevent potential disruptions.
In a positive development, the NEPRA documents also reveal that the DISCOs have achieved an approximate saving of Rs 2.25 billion through efforts to reduce transmission and distribution losses. This saving is the result of improved efficiency in the power network, which helps counterbalance the requested increase and slightly reduces the total financial burden on consumers.
DISCOs’ requests, made in line with the notified mechanism for quarterly adjustments, cover capacity charges, transmission charges, market operator fees, incremental unit impacts, transmission and distribution loss impacts, and variable operations and maintenance costs.
The November 20 NEPRA hearing will examine the request in detail and determine whether the proposed adjustment should be implemented. If approved, the rate hike will be reflected in consumers’ monthly bills, potentially impacting household budgets across the country. This request comes amid ongoing financial pressures in the power sector, highlighting the challenges of balancing operational costs with consumer affordability in Pakistan’s energy market.
