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Business Recorder
2 days ago
- Business
- Business Recorder
Nepra alarmed at 1700MW govt power outage
ISLAMABAD: National Electric Power Regulatory Authority (NEPRA) has expressed its concerns on continuous outage of over 1700 MW cheap electricity from two government owned power plants which is financially overburdening the consumers, well informed sources in NEPRA told Business Recorder on Wednesday. These concerns were conveyed by Chairman NEPRA, Waseem Mukhtar with the concerned stakeholders in writing. According to Chairman NEPRA, Neelum Jhelum Hydropower Project (NJHPP) was developed to make a significant contribution to Pakistan's energy supply and to offset the reliance on fossil fuels. However, since its commissioning, the plant has encountered numerous issues, including two major shutdowns. The first occurred in 2022 (July 05, 2022 to August 06, 2023), followed by a second in 2024 (May 01, 2024 to till date). The NJHPP was shut down on May 1, 2024, due to persistent pressure drops in the Headrace Tunnel, with subsequent inspection revealing collapses, silt accumulation, invert damage, seepage, and other structural issues, rendering the plant non-operational. Nepra spells out factors aggravating power sector woes According to Chairman NEPRA from 2008 to 2018, electricity consumers of Pakistan, excluding KE, were charged an additional fee 'Neelum Jhelum Surcharge' at Rs. 0.1/kWh. This surcharge resulted in a total recovery of approximately Rs. 75.484 billion, which was used to finance the development of the Neelum Jhelum Hydropower Project. 'The prolonged forced outage of NJHPP, prevented it from contributing fully to the national grid and relatively expensive plants are being dispatched by the System Operator to meet system load demand. As a result, consumers are now paying an average of Rs. 0.54/kWh every month owing to the outage. This extra burden, which stems from the inability of the project to deliver its expected benefits is likely to continue for an extended period,' said Mukhtar. Regarding the plant's restoration, it was noted by CPPA-G that after the award of the Contract the remedial works required for re-commissioning of the Project may take about two years which is quite alarming and signal that the consumers will bear extra burden for the period. The consumers will bear the contribution for around ten years to develop the Neelum Jhelum Hydropower Project. In addition to the above, the prolonged outage of the Steam Turbine unit of Guddu 747, which went out of operation following a fire incident in July 2022, was advised repeatedly by NEPRA as in the past. Chairman NEPRA reiterated once again that owing to efficient generation capability and availability of indigenous gas Guddu 747 holds a high ranking in the economic merit order. However, the outage has substantially reduced the generation capability of the Guddu complex and put the plant into Open Cycle operation thereby leading to reliance on more expensive and less efficient power plants. The resultant increase in consumer-end tariffs has placed an undue financial burden on electricity consumers and till date, the cumulative financial loss attributable to the outage of Steam Turbine unit of Guddu 747 stands at approximately Rs 127 billion ($ 453 million), and this figure continues to escalate on a daily basis, he added. He further contended that the generation facilities at Guddu complex have a pivotal role in system stability by providing reactive power support—- Mega Volt-Amperes Reactive (MVARs) and preventing the total power system collapse. However, due to prolonged forced outage the plant is unable to provide sufficient MVARs that put the system at stake and enhances its vulnerability to undesired events. Chairman NEPRA stated that given the critical role of both generation facilities resulting in financial implications and growing consumer burden, an immediate intervention was requested to expedite rehabilitation of the Steam Turbine unit of Guddu 747 and Neelum Jhelum Hydropower Project. He added that timely action in this regard will substantially mitigate further operational challenges and prevent the additional burden from being transferred onto consumers. Copyright Business Recorder, 2025
Business Recorder
24-05-2025
- Business
- Business Recorder
Less hydel output: Generation mix changes may affect rebased tariff: Nepra
ISLAMABAD: The National Electric Power Regulatory Authority (Nepra) on Friday said that impact of change in generation mix due to less hydel generation is expected to effect the proposed rebasing tariff for the fiscal year 2025-26. Testifying before Senate Standing Committee on Power, presided over Senator Mohsin Aziz, Nepra Chairman Waseem Mukhtar said since there is substantial decrease in rains in the country, it will alter the projected generation mix for next fiscal year, which implies that whatever relief was expected for next year, will not be available. The standing committee was apprised that current relief of Rs 7.41 per unit is available to consumers from April 2025, of which the impact of revision or termination of agreements is around Rs 1.81 per unit, QTA Rs 2.37 per unit, FCA Rs 1.12 per unit and Rs 2.12 per unit due to raising the Petroleum Levy will continue but relief under QTAs and FTAs is subject to economic conditions of the country and the price of fuel in the international market. Hydel reduction forecast: Nepra seeks generation plan from PD Minister for Power, Awais Leghari informed the committee that he has held a meeting with the Finance Minister on deduction of provinces reconciled amounts. Currently an amount of Rs 161.472 billion is outstanding against provinces but no province is ready for reconciliation except Punjab. Of total receivables of Rs 161.472 billion, share of Punjab is Rs 41.832 billion, Sindh, Rs 67.960 billion, Balochistan, Rs 41.600 billion and KP, Rs 10.080 billion. The minister expressed anger at the absence of senior officials from PPMC and CPPA-G to respond to queries of Standing Committee members as junior officials were unable to provide the explanations requested by the Committee members. On the issue of ToU meters, the minister stated that an exercise has been done in coordination with Aptma, which proves that if the mechanism of ToU meters is done away with it will have additional impact of Rs 35 billion on industry. Copyright Business Recorder, 2025
Business Recorder
23-05-2025
- Business
- Business Recorder
March 2025: Nepra may approve Rs3.50 negative adjustment
ISLAMABAD: The National Electric Power Regulatory Authority (NEPRA) is likely to approve a negative adjustment of Rs 3.50 per unit for consumers of Karachi for March 2025. This comes after accounting for a pending amount of approximately Rs 3 billion related to partial load, open cycle operations, degradation curves, and startup costs. In its petition, K-Electric (KE) had initially proposed a refund of Rs 6.792 billion against the billing for March 2025. However, if the Rs 3 billion adjustment is approved, the net refund to consumers will amount to Rs 3.8 billion. The NEPRA, comprising Chairman Waseem Mukhtar and other members, presided over a public hearing marked by a heated exchange. Member (Technical), Rafique Ahmad Shaikh, sharply criticised KE CEO Syed Moonis Abdullah Alvi for failing to provide electricity even in high-theft areas, despite the widespread use of illegal connections (commonly referred to as kunda). March FCA: KE seeks Rs5.02 interim negative adjustment Member Shaikh rejected the CEO's proposal that NEPRA should issue a public appeal urging Karachi residents to pay their bills in exchange for guaranteed electricity supply. Karachi consumers present at the hearing complained about rampant unscheduled load shedding during the summer and inflated electricity bills, questioning why NEPRA had not yet penalized KE. Responding to a question regarding electricity theft and the measures being undertaken to combat it, Moonis Alvi, CEO of K-Electric, emphasized that the utility remains fully committed to curbing power theft through all necessary actions. However, he noted that these efforts are often met with violent resistance from those involved in such illegal activities. The KE staff and infrastructure continue to face serious threats, with recent incidents in P&T Colony and Nazimabad highlighting the severity of the situation—where even law enforcement agencies struggled to safely extract KE personnel from mob attacks. Member Shaikh was unconvinced, questioning the pattern of power cuts. 'Are connections cut for just three hours, and power resumes afterward? Why is there no load shedding during winter months?' he asked. Shaikh, who is also a member of the Sindh government and resides in Karachi, expressed skepticism about the official narrative. Alvi reiterated his request for the NEPRA to publicly urge citizens to pay their bills to avoid disconnections, but Shaikh dismissed the suggestion as 'childish,' adding that the actual condition of KE's distribution network is far worse than portrayed. Tanveer Barry, a representative from the Karachi Chamber of Commerce and Industry (KCCI), also raised concerns. He said KE had requested NEPRA to allow adjustments for previously unaccounted actual fuel costs from prior months. 'If this adjustment is approved, the full benefit of the Fuel Cost Adjustment (FCA) will not be passed on to consumers,' Barry noted. He highlighted operational inefficiencies in KE's system, pointing to high startup and standby times for multiple generating units—symptoms of poor load management and frequent cycling that increase per-unit fuel costs. Barry further emphasized that many of KE's older plants have poor heat rates and low thermal efficiency. A heavy reliance on expensive re-gasified liquefied natural gas (RLNG) and occasional use of high-speed diesel (HSD) have also inflated generation costs. Copyright Business Recorder, 2025
Express Tribune
16-05-2025
- Business
- Express Tribune
NEPRA flags power woes for industry
Listen to article The National Electric Power Regulatory Authority (Nepra) has directed the Power Division to address the concerns of the industrial sector regarding inconsistent power supply. Industries are reportedly considering a return to captive power plants (CPPs) despite their higher operational costs due to frequent grid supply disruptions. The directive was issued during a public hearing on a petition filed by the Central Power Purchasing Agency-Guarantee (CPPA-G) concerning the assumptions used to project the power purchase price (PPP) for financial year 2025-26. The hearing was chaired by Nepra Chairman Waseem Mukhtar and attended by Member (Technical) Sindh Rafique Ahmad Shaikh, Member (Technical) K-P Maqsood Anwar Khan and Member (Law) Amina Ahmed. CPPA-G presented seven scenarios for the proposed PPP. In scenario one, it projected the price at Rs24.75 per unit, scenario two – Rs26.04 per unit, scenario three – Rs25.88 per unit, scenario four – Rs26.33 per unit, scenario five – Rs26.70 per unit, scenario six – Rs26.55 per unit and scenario seven – Rs26.22 per unit. Replying to a question, CPPA-G representative Naveed Qaiser said that scenarios four and five were likely to be implemented next year. However, those projections were challenged by several interveners, who argued that the estimates did not adequately reflect the expected decline in hydropower generation. They also criticised the assumed exchange rate of Rs290/$, which was likely to influence future electricity pricing. During the hearing, it was revealed that the PPP could drop by 78 paisa to Rs2.25 per unit, potentially saving consumers Rs140 billion to Rs400 billion in the next fiscal year. The average purchase price is expected to range between Rs24.75 and Rs26.22 per unit compared to the current average of Rs27 per unit. Authorities projected a possible Rs2-per-unit reduction in tariffs alongside a 2.8% to 5% increase in demand, assuming an exchange rate of Rs300/$ in FY 2025-26. The case officer explained that due to varying demand and fuel price assumptions, average per-unit prices in different scenarios could range between Rs6.8 and Rs8.1. Total fuel costs might reach Rs1.28 trillion, influenced by exchange rate fluctuations, inflation and interest rates. Some scenarios also predict a 24% reduction in electricity prices compared to the current year. Transmission losses for National Transmission and Despatch Company (NTDC) are expected to remain stable at 2.80%. Nepra questioned the Ministry of Energy's optimistic demand projections, especially given the recent downward trends. In response, ministry officials argued that demand was expected to rebound in line with the projected GDP growth. They noted that electricity demand rose 28% in April, attributing the uptick to recent tariff reductions that encouraged industries to reconnect to the grid. The projections of CPPA-G were challenged by the interveners, who stated that PPP projections for FY26 were not correct, as a reduction in hydel generation was imminent. The budget for FY26 is projected to be prepared at an exchange rate of Rs290 per dollar. During the hearing, it was revealed that the PPP was estimated to decrease by 78 paisa to Rs2.25 per unit, which could provide relief worth Rs140 billion to Rs400 billion to electricity consumers in the next fiscal year. According to officials, the estimated PPP for the upcoming fiscal year will range between Rs24.75 and Rs26.22 per unit, compared to Rs27 per unit for the current fiscal year. Authorities also estimated a Rs2-per-unit reduction in electricity prices and a 2.8% to 5% increase in demand. The US dollar is projected to be valued at Rs300 in the next fiscal year. The case officer informed Nepra that the request pertained to PPP projections for the coming fiscal year. Different scenarios suggest a significant variation in electricity prices, with the average per-unit price likely to remain between Rs6.8 and Rs8.1. Due to potential increases in fuel costs, the total fuel cost could rise to Rs1,284.11 billion. Factors such as the dollar rate, inflation and interest rates impact electricity prices, which is why prices are expected to be higher in scenarios with low demand and high fuel costs. The briefing revealed that compared to the current fiscal year, some scenarios could result in a 24% decrease in electricity prices, while transmission losses for NTDC are expected to remain at 2.80%. Nepra questioned the Ministry of Energy's claims regarding increased electricity demand. The authority's chairman asked how an increase was expected when demand had been declining in recent years. The Ministry of Energy responded that demand was expected to rise based on GDP growth and recent reductions in electricity prices had already led to an increase in demand. In April, electricity demand increased by 28% and industries have started returning to the grid. If tariffs remain low, electricity demand will increase. The Ministry of Energy also briefed Nepra on fuel price projections for the next fiscal year. Officials stated that the cost of gas for electricity generation was estimated at Rs1,050 per mmBtu. Thar coal is projected to cost $20 per ton from July to September and $18 to $19 per ton from October to June. Imported coal (API 4) is estimated to remain at $100 per ton throughout the year, imported coal (ICI 3) at $74 per ton and imported coal (ICI 5) at $35 per ton. Brent crude oil is expected to be priced at $74 per barrel until January 2026 and $72 per barrel from March to June 2026. According to the Nepra briefing, furnace oil is estimated to cost $522 per ton from July to December and $508 per ton from January to June. The price of high-speed diesel is expected to remain at Rs264 per litre throughout the year. The Ministry of Energy added that according to the IMF, the GDP was expected to grow by 3.6% in 2026 and electricity demand was projected to increase by 2.8% to 5%. Demand on the 132kv grid may reach between 128,000 million and 131,000 million units. Officials stated that electricity demand dropped significantly in 2023, improved somewhat in 2024 and was expected to grow steadily in the coming years.
Business Recorder
15-05-2025
- Business
- Business Recorder
Textile sector may return to costlier CPPs: PD's PPP projections to Nepra draw sharp criticism
ISLAMABAD: The Power Division came under heavy criticism on Thursday for submitting what were termed unsubstantiated Power Purchase Price (PPP) projections for FY 2025-26 to Nepra and for the continuing unreliable power supply by distribution companies (Discos). Concerns were raised that these issues could drive the textile sector back to costlier Captive Power Plants (CPPs), despite grid electricity being comparatively cheaper. The National Electric Power Regulatory Authority (NEPRA) held a public hearing chaired by Waseem Mukhtar, with participation from Member (Technical) Sindh Rafique Ahmad Shaikh, Member (Technical) KPK Maqsood Anwar Khan, and Member (Law) Amina Ahmed. Discussions revolved low hydrology levels, inflation, interest rate forecasts, GDP growth, solar tariffs, and fuel price assumptions. The Power Division team, led by Additional Secretary Mehfooz Bhatti and CPPA-G's Naveed Qaiser, presented seven scenarios using sensitivity analysis based on demand, hydrology, fuel prices, and exchange rates. In scenario one, CPPA-G has projected PPP at Rs 24.75 per unit, scenario 2- Rs 26.04 per unit, scenario 3- Rs 25.88 per unit, scenario 4- Rs 26.33 per unit, scenario 5- Rs 26.70 per unit, scenario 7- Rs 26.55 per unit and scenario 7, Rs 26.22 per unit. In response to a question, the representative of CPPA-G said that scenario 4 and 5 are likely to be implemented next year. Across the analyzed scenarios, indigenous fuels constitute 55% to 58% of the overall energy mix, while clean fuels contribute between 52% and 56%. Scenario 5 — marked by a high exchange rate of Rs 300/$, low hydrology, standard fuel prices, and normal demand—yields the highest projected PPP at Rs. 26.70/kWh. In contrast, Scenario 4 which assumes normal demand and an exchange rate of Rs 280/$, results in the lowest PPP at Rs. 24.75/kWh, primarily due to reduced capacity charges. Policy overhaul needed for textile sector CPPA-G representative Naveed Qaiser noted that the GDP growth, inflation and interest rates were projected on the information from IFIs, Finance Ministry and domestic financial experts. Amir Sheikh from Lahore stated that industry demands that electricity tariff decreases and in no way increases from July onwards as compared to the April/May/June quarter. 'Already the quality of power from grid is very poor resulting in up to 10% production loss as compared to captive generation and industry is considering switching back to captive. If tariff also increases, then it would lead to big fall in consumption,' he said adding that despite major renegotiations with IPPs, industry is amazed that the proposed tariff for next year is almost the same as last year and the benefit from renegotiations is nowhere to be seen. 'The various price deductions that were announced by Nepra were all time-bound till June. Therefore, if base tariff is not decreased from July 1, 2025 the tariff may increase by Rs 5-6 after the benefit of negative QTA and FCA will be over,' Amir Sheikh said. Chairman Nepra Waseem Mukhar directed Power Division to look into the viewpoint of industry, especially with recent poor quality of power supply from Discos, which is an irritant for industry and to provide future projections of power rates so that industry can make its plans accordingly. Mehfooz Bhatti, Additional Secretary Power said that abrupt suspension of supply is a serious issue and he would look into it through Power Planning and Monetary Company (PPMC). Arif Bilwani said that hydrology assumptions are very critical as we are facing substantially reduced water flows because of draught like conditions. Nepra has already directed the CPPA to prepare report and share and requested that the report be displayed on Nepra website. 'GDP growth figure is also on higher side as the World Bank has revised its projections downward from 2.8% to 2.7%. Demand growth is also not reflecting ground realities. Consistent decline in industrial demand particularly from LSM is being reported for the last 1 1/2 years, he added. 'Benefits of renegotiation with IPPs and GENCOS is not being reflected in Capacity Payments. Further increase in CPP (Rs. 60 billion) will accrue due to Jamshoro imported coal power plant. There is no mention/impact of renegotiation with the left out IPPs, GENCOs & Chinese power plants,' Bilwani argued. Kibor has been assumed at 11.9% although it is expected to be further reduced during the year reaching single digit. Inflation has been assumed at 8.65% which is extremely high, although the country is already witnessing, as per GOP, the lowest inflation in decades. There is a need to readjust the two figures. Bilwani further stated that the impact of solar Net Metering has not been properly accounted for in the assumption and requires to be looked at. The representative of Punjab Power Board enquired as to what was the financial impact of renegotiated IPPs and have the PPAs been made part of the assumption as projections of capacity payments are the same as last year. Naveed Qaiser responded that government had projected Rs 4 trillion reduction in capacity but reduced it to Rs 2 trillion to 2.4 trillion due to COD of Jamshoro Power Plant which will cost Rs 60 billion and Shahtaj Sugar Mills. Member KPK, enquired as to how much will the industrial tariff be reduced? The representative of CPPA-G stated that electricity rates can be reduced from 1 per cent to 8 per cent. According to Qaiser, projections for GDP growth, inflation, and interest rates are based on input from IFIs, Finance Division and other relevant entities. Nepra Chairman Waseem Mukhtar instructed the Power Division to take the concerns of industry seriously, particularly regarding poor service quality from Discos and future power pricing so industries can plan accordingly. Bhatti acknowledged that sudden power interruptions are a major issue and added that there is a commitment to addressing them through the PPMC. Tanveer Barry, representative from KCCI Karachi said that the projected power purchases ranges between Rs 24.75/kWh and Rs 26.22/kWh is still very high. This level of tariff undermines industrial competitiveness and increases the cost of doing business and may deter export growth. He further argued that the government claimed that it has saved trillions of rupees through negotiated agreement but capacity charges are still very high. In Pakistan industrial sector is paying almost double the electricity price as compared to other regional countries. Time of Use power tariff structure for industrial consumers should be abolished. Industrial consumption is declining because of expensive electricity. Expensive power plants should be shut down and replaced with efficient power plants and renewable energy. Rehan Jawed stated that the government should take a decision on net metering otherwise it will be become a big issue for the power sector like IPPs issue. The representative of Aptma, Amir Riaz criticised the planners for making irrelevant decisions. He proposed integrated approach to reduce electricity rates for the industry. Copyright Business Recorder, 2025
