Latest news with #Nepra
Express Tribune
2 days ago
- Business
- Express Tribune
Power generation stabilises after falling for two years
Nepra said earlier this year that state-owned power generation companies fared poorly in the wake of lack of maintenance, deterioration of equipment, insufficient technical expertise, poor management and underutilisation of installed capacity. PHOTO: FILE Pakistan's power generation reached 127,159 gigawatt-hours (GWh) in financial year 2024-25, remaining almost unchanged as compared with previous year's production of 127,059 GWh, according to a report released on Monday. The stability in power generation came following a decline over the past two years. Year FY25 could be divided into two parts – in the first nine months (July-March), power generation fell 2% to 90,147 GWh while in the fourth quarter (April-June), the generation increased 7% to 37,012 GWh. The recovery in the latter part of the year helped offset the earlier decline, said Topline Research in its report. The uptick in 4QFY25 was led by the diversion of captive power plants to the national grid after the government imposed an off-grid levy on captive power users, effective from February 2025. Furthermore, the government also announced a reduction in the overall unit cost in the April-June quarter after using savings that stemmed from tariff negotiations with the independent power producers (IPPs) and the reallocation of petroleum development levy (PDL). In the first three quarters, the report mentioned, the electricity generation declined as bulk buyers largely relied on their own captive power production by using furnace oil, gas and other fuel sources. Hydel electricity contributed the most to total production, having a 31.44% share in FY25 compared to 31.38% in FY24. It was followed by re-gasified liquefied natural gas (RLNG)-based power production, which accounted for 17.48% of total production against 18.70% a year earlier. Local coal-fired plants contributed 12.23% in FY25 vs 12.51% in FY24 while imported coal-run plants had a 7.13% share compared to 3.40% in FY24. Nuclear, gas, wind and furnace oil-based generation contributed 17.66%, 8.82%, 3.02% and 0.41%, respectively. Three new hydroelectric power additions to the system include SK Hydropower Station, initially commissioned at 221?megawatts, with total planned capacity of 884?MW; Pehur Hydel Power Plant, having capacity of 18?MW; and Marala Hydropower Plant, with a capacity of 7.64?MW. Additionally, the Lakhra Power Plant (Genco-IV), a 150MW coal-fired facility, has also been added. In FY25, the average generation cost edged down 2% to Rs8.6 per kilowatt-hour (kWh) compared to Rs8.8 per kWh in FY24. In June alone, the fuel cost dipped 9% year-on-year (YoY) but was up 1% month-on-month to Rs7.9 per unit. "It is interesting to note that around 46% of power generation came from RLNG, coal and gas with average fuel cost of Rs16.5 per unit in FY25," Topline commented. Separately, the cost of imported coal-based generation declined 28% YoY to Rs16.7 per kWh due to a 5% drop in international coal prices. Similarly, the RLNG cost decreased 1% on the back of a decline in international crude oil prices by 12% to $70 per barrel in FY25. "We expect 5-8% growth in electricity consumption in FY26 due to gradual and continuous transition of captives to the national grid and imposition of PDL on furnace oil. Furthermore, gradual economic recovery amidst easing interest rates will also help increase power generation," the report added.
Business Recorder
5 days ago
- Business
- Business Recorder
June FCA: CPPA-G seeks 65 paisa negative adjustment
ISLAMABAD: The Central Power Purchasing Agency–Guaranteed (CPPA-G) has sought negative adjustment of paisa 65 per unit in FCA for June 2025 to refund Rs 8.7 billion for consumers across the board. The Nepra is scheduled to hold a public hearing on July 30, 2025 to seek further explanation from CPPA-G and give opportunity to consumers' representatives to express their views on FCA adjustment data. According to data submitted to Nepra, in June 2025 hydel generation was recorded at 5,410 GWh - 39.36 percent of percent total generation. PD blocks Rs4.69/unit FCA relief Power generation from local coal-fired power plants was 1,510 GWh in June 2025 which was 10.99 per cent percent of total generation at a price of Rs 1.5121 per unit whereas 1,597 GWh was generated from imported coal at Rs 15.1600 per unit (percent). Generation from HSD whereas 151 GWh were produced on RFO at a rate of 28.8873 per unit. Electricity generation from gas-based power plants was 968 GWh (7.04 percent) at Rs12.3883 per unit. Generation from RLNG was 2,216 GWh (16.12 percent of total generation) at Rs 21.8716 per unit. Electricity generation from nuclear sources was 1,383 GWh at Rs 2.4488 per unit (10.06 percent of total generation), and electricity imported from Iran was 47 GWh at Rs 22.5153 per unit. Power generation from baggasse recorded at 35 GWh at a price calculated at Rs 9.8651 per unit. Generation from solar was recorded at 106 GWh which constituted 0.77 per cent of total generation. Energy generation from wind was recorded at 522 GWh (3.80 per cent) of total generation. According to the CPPA-G, energy generated in June 2025 stood at 13,744 GWh at a total price of Rs 108.166 billion which was Rs 7.8698 per unit. However, after inclusion of Rs 4.832 billion of previous negative adjustments and Rs 1.113 billion negative adjustment as sale to IPPs and transmission losses of negative 409 GWh (- Rs 2.97 per unit, the net delivered to Discos was recorded at 13,310 GWh at a rate of Rs 7.6800 per unit. The CPPA-G argued that since the generation cost in June 2025 was recorded at 7.6800/kWh against the reference rate of Rs 8.334/kWh, hence a negative adjustment of Rs 0.6541/kWh for all categories of consumers should be approved. Copyright Business Recorder, 2025
Express Tribune
5 days ago
- Business
- Express Tribune
KE base tariff raised by Rs6.15 per unit
Prior approval to NEPRA K-electric consumer may seen a huge relief over electricity bills. PHOTO: FILE In a bold assertion of its regulatory autonomy, Pakistan's power watchdog has notified K-Electric's long-delayed multi-year tariffs for supply, distribution, and transmission through 2030 — despite an unresolved review motion by the federal government. The power regulator has notified Rs6.15 per unit increase in base tariff for KE consumers. The government implements uniform across the country and government provides subsidy for KE consumers to implement uniform tariff. The National Electric Power Regulatory Authority (Nepra) moved ahead with the notification after determining that no legal bar existed to halt implementation. It invoked its enhanced powers under a 2021 legal amendment, which allows the regulator to issue tariff notifications directly — authority that previously rested with the federal government. The landmark move reflects pressure from international lenders, notably the IMF and the World Bank, to depoliticize tariff-setting and fast-track power sector reforms. "This situation could impair KE's financial health and undermine power supply continuity, ultimately affecting consumers and the broader energy market," Nepra warned in its statement. The newly notified average power supply tariff for KE stands at Rs 39.97 per kilowatt-hour for 2023-24, comprising Rs 31.96/kWh in power purchase cost, Rs 2.86 for transmission, Rs 3.31 for distribution, and Rs 2.28 as the supply margin. A prior year adjustment of minus Rs 0.44/kWh has also been included. Nepra estimated KE's total revenue requirement for FY 2023-24 at Rs 606.9 billion, with Rs34.7 billion allocated for supply margin and Rs 36.2 billion set aside to cover recovery losses. Despite the formal tariff approval, KE's finances remain under severe pressure. With bill recovery slipping to 91.5pc in FY 2023-24 and projected to fall to 90.5pc next year, the utility could face cumulative under-recoveries nearing Rs97 billion over two fiscal years. Nepra cautioned that KE's permitted Rs21.6 billion return on distribution operations might be wiped out without government support or adjustments. Nepra simultaneously approved a distribution tariff of Rs 3.31/kWh and Rs 2.684/kWh specifically to support a Rs 43.4 billion investment plan over the seven-year Multi-Year Tariff period. The government had challenged K-Electric's multi-year tariff (2024-30) approved by the power regulator last week, alleging the utility got an undue favour of Rs750 billion over the seven-year period at the cost of the national exchequer, power consumers across the country and taxpayers at large. In a statement, the power division had announced that the six tariff interventions allowed by Nepra to KE entailed a financial impact of Rs453bn spread over seven years. On top of that, the division added, a fuel cost impact higher than the national average for 2024-25 alone meant an additional cost of Rs41bn, which even if it remains flat would translate into Rs287bn in seven years. The division said the government position was to seek review of the Nepra determination to ensure fairness and uniformity, tariff must reflect actual costs and reasonable returns to protect consumers and there should be no extra allowance for inefficiency.
Business Recorder
16-07-2025
- Business
- Business Recorder
Industrial power tariff: Power Div, APTMA at odds over cross-subsidy calculation
ISLAMABAD: The Power Division and the All Pakistan Textile Mills Association (APTMA) appear to be at odds over the actual volume of cross subsidy embedded in industrial power tariffs, with APTMA claiming that the burden is nearly twice what the Power Division reports. The dispute emerged at a time when the Power Division claims it is engaging with the industry to further reduce cross subsidies to ease the financial strain on industrial consumers. The Division had earlier announced a reduction of Rs 174 billion in cross subsidies. 'We do not agree with the Power Division's calculation of Rs 74 billion in cross subsidies in industrial power tariffs,' stated Shahid Sattar, Secretary General of APTMA, in a letter addressed to Power Minister Sardar Awais Khan Leghari. 'According to our analysis based on Nepra's determination of consumer-end tariffs for FY26, the actual cross subsidy amounts to at least Rs 137 billion.' PD uncertain on power tariff changes from July 1 APTMA defines cross subsidy as the difference between a consumer's cost of service, which includes generation, transmission, distribution, and associated margins, and the effective price charged by the government of Pakistan. Under Section 31(4) of the Regulation of Generation, Transmission and Distribution of Electric Power Act, 1997, Nepra is mandated to determine a uniform tariff for public sector licensees in the interest of consumers. The National Electricity Policy 2021 also allows the government to propose uniform tariffs across consumer categories based on socioeconomic objectives, budgetary targets, and regulator recommendations. According to APTMA, power tariff determination results in two sets of tariffs: one determined by Nepra, which reflects the true cost of service across consumer categories, and another proposed by the government, which applies cross subsidies. Nepra's tables show that residential users consuming up to 300 units and non-ToU agricultural consumers are charged below-cost tariffs. In contrast, other consumer categories, including industry, pay higher-than-cost tariffs to cover the resulting revenue gap—effectively bearing the cross subsidy burden. 'Our calculations, using category-wise consumption data from the FY25 determination (due to lack of FY26 data), indicate a cross subsidy of nearly Rs 140 billion in industrial power tariffs. This figure may rise by 2–3% based on CPPA-G's projected demand growth for FY26,' APTMA noted. APTMA suggests that the Power Division's Rs 74 billion figure likely uses an average system-wide benchmark—such as the FY26 Power Purchase Price (PPP) of Rs 25.98/kWh—instead of Nepra's cost-reflective tariffs by category. Based on this method, APTMA acknowledges the cross subsidy may drop to around Rs 85 billion, closer to the government's estimate. However, APTMA insists the cross subsidy should be calculated against actual cost of service per consumer category, not a generalised average. 'If the goal is to deliver cost-reflective and competitive power tariffs, it's critical that government and stakeholders align on definitions and calculation methodologies.' APTMA reiterated its long-standing demand for a regionally competitive power tariff of 9 cents/kWh. This demand, it says, is supported not only by regional benchmarks (5–9 cents/kWh) but also by domestic cost-of-service studies that show tariffs for 83–84% of Pakistani consumers' hover around 9 cents/kWh. Nepra's own determination supports this, with industrial base rates set at Rs 21.65/kWh (off-peak) and Rs 30.76/kWh (peak) for July 2025, equating to roughly 9.5 cents/kWh before applying cross subsidies. On the issue of wheeling charges, APTMA argues that the current rate of about 4.5 cents/kWh undermines the viability of the Competitive Trading Bilateral Contract Market (CTBCM) for renewable energy. For a textile unit operating three shifts, only 20% of its energy demand can be met at a viable rate (~8 cents/kWh) through wheeling. The remainder must be sourced from the grid, where marginal costs—particularly from RLNG plants—total around Rs 37.79/kWh (or 13.4 cents/kWh), resulting in an average energy cost of 12.32 cents/kWh, significantly above the industry's target. APTMA emphasised the need for tariff predictability, which is crucial for long-term business planning. Volatile rates pose major challenges, particularly for exporters. The Association urged the Power Minister to reconsider wheeling charges and allow hybrid consumers (those using both CTBCM and grid power) to retain access to the industrial tariff, enhancing predictability and competitiveness. APTMA also acknowledged the government's new incremental consumption package, calling it a 'substantial improvement' over previous schemes, which were complex and impractical for industry adoption. 'We appreciate that industry feedback is now being actively considered in policy design,' the Association added. On the topic of industrial Time of Use (ToU) tariff reform, APTMA said it has recently engaged with Abid Lodhi and Naveed Qaiser at PPMC. 'They outlined several system constraints, and we are now developing a proposal for a more flexible ToU tariff structure, which we plan to submit in the coming weeks,' said Sattar. Copyright Business Recorder, 2025
Business Recorder
15-07-2025
- Business
- Business Recorder
Discos's miraculous second half recovery
The Ministry of Energy (Power Division) has taken to social media and press briefings with a celebratory tone, touting a dramatic decline in inefficiency losses by discos during FY25 — from Rs591 billion in the previous year to Rs400 billion. A reduction of Rs191 billion is no small feat. But let's not lose sight of the fact that a Rs400 billion loss is still nothing short of catastrophic. It may be a better year, but it's far from a good one. What truly deserves a double take is what transpired in the second half of FY25. According to the Power Minister, recoveries surged to 96.06 percent for the full year — up from a modest 92.02 percent at the end of December 2024. That's a lot of ground covered in just six months. Some might even call it… magical. To put things into perspective: at the halfway mark of the fiscal year, discos had billed Rs3.12 trillion and collected Rs2.87 trillion — a shortfall of Rs249 billion. And then, in the remaining six months, they somehow managed to collect Rs117 billion more than what they billed. In other words, the second half of FY25 witnessed over 100 percent recovery. Approximately 3 billion units' worth of 'extra' collection materialized. Remarkable, no? Of course, consumption patterns, seasonal variations, and tariff structures differ across fiscal halves — that much is fair. But historically, it is the second half that has contributed the lion's share of inefficiency losses — about 60 percent in each of the past two years. That this trend reversed so dramatically in FY25, and with lower effective tariffs in Q4 no less, is a statistical curiosity. The Minister also claimed the recovery was the highest in history. Not quite. FY21 still holds the title at 97 percent. So while the recovery this year may be impressive, it's not unprecedented. Unless, of course, we're using a new definition of "record-breaking." Now, if the recovery side of DISCO inefficiencies is truly turning a corner — that would be welcome news. But for now, let's just say we await Nepra's State of Industry Report for a little more. Whenever it arrives. The second half of the inefficiency equation — Transmission & Distribution (T&D) losses — tells a different story. Here, performance has remained stubbornly poor. The T&D loss rate is still hovering close to 18 percent — miles away from Nepra's target of 11.4 percent. In financial terms, the 'improvement' has been a mere Rs10 billion. Hardly worth framing. Worse still, the gap between allowed and actual T&D losses is now the widest in recent memory. Over the last seven years, losses have moved within a tight band — and not in a good way. There has been little meaningful progress despite ambitious targets and consistent tariff adjustments. And let's not forget — these calculations only account for losses above the allowed threshold. The rest are already priced into consumer tariffs. So, every extra percentage point of inefficiency is a direct transfer from taxpayers and bill-payers to system leakage. In sum: one half of the disco loss problem appears to have undergone a miraculous transformation — or so we're told. The other half continues to underwhelm. Until both parts of the puzzle are fixed — with transparency and structural reform rather than spin — the sector's chronic inefficiencies will remain business as usual.
