Staff Report
ISLAMABAD: The National Electric Power Regulatory Authority (NEPRA) has announced a reduction of Rs1.228 per unit in electricity tariffs for state-owned power distribution companies (DISCOs), effective in February 2025 bills. This adjustment, based on the Fuel Charges Adjustment (FCA) for December 2024, comes after the Central Power Purchasing Agency (CPPA) petitioned for a Rs1.0353 per unit refund. Following a public hearing on January 30, NEPRA assessed and approved a uniform decrease of Rs1.23 per unit.
The reduction applies to all consumer categories except lifeline consumers, domestic users consuming up to 300 units, electric vehicle charging stations (EVCS), pre-paid consumers across all categories, and agricultural consumers of all ex-WAPDA DISCOs. NEPRA clarified that this negative adjustment also extends to domestic consumers with Time of Use (ToU) meters, regardless of their consumption levels.
In cases where February 2025 electricity bills were issued prior to this notification, the adjustment will be applied in the March 2025 bills.
For K-Electric (KE) consumers, NEPRA has approved a negative FCA of Rs1.23 per unit for November 2024, to be reflected in February 2025 bills. If February bills were issued before this notification, the adjustment will appear in the subsequent month’s bills. This FCA for KE is provisional, pending finalization of the utility’s Multi-Year Tariff (MYT) for the 2024-30 period. Any cost differences arising from the MYT determination will be incorporated into future adjustments.
NEPRA Member Tariff Mathar Niaz Rana noted that the approved negative FCA of Rs1.23 per unit for KE’s November 2024 billing is significantly lower than the Rs4.98 per kilowatt-hour (kWh) requested by the utility. NEPRA determined that KE’s actual FCA should be negative Rs5.00 per kWh, totaling Rs7.21 billion cumulatively, but withheld Rs5.44 billion pending scrutiny of Rs8.7 billion in costs related to part load, open cycle operations, degradation curves, and start-up costs under KE’s MYT.
Some officials argue that the full FCA relief should be passed on to consumers, as anticipated after the public hearing. NEPRA will decide later whether to adjust the withheld amount upfront or stagger it over future FCA determinations.
Additionally, consumers are set to benefit from a further reduction of up to Rs2 per unit in power tariffs, amounting to Rs52 billion, due to the second quarterly adjustment for the ongoing financial year. Following a public hearing chaired by NEPRA Chairman Waseem Mukhtar, the regulator indicated that DISCOs, including K-Electric, will refund over Rs52 billion to electricity consumers under this adjustment. The major portion of the proposed relief stems from a reduction in capacity payments.
