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Business Recorder
05-08-2025
- Business
- Business Recorder
Nepra hints at negative tariff adjustment of Rs1.80/unit
ISLAMABAD: The National Electric Power Regulatory Authority (Nepra) on Monday hinted at negative adjustment of Rs 1.80 per unit in quarterly tariff adjustment for fourth quarter of FY 2024-25 which will replace Rs 1.54/kWh for third quarter of previous fiscal year, ordering inquiry of claims of Discos figures. During a public hearing on QTA adjustment for fourth quarter of FY 2024-25, presided over by Chairman Nepra, Waseem Mukhtar, the Discos sought negative adjustment of Rs 53.393 billion of which the share of reduction in capacity payment was Rs 53.714 billion. The Power Division has indicated negative adjustment of Rs 1.90/kWh. NEPRA's Member (Technical) Rafique Ahmad Shaikh challenged the Discos' performance narrative, citing past cases such as SEPCO, where NEPRA uncovered widespread misuse of detection billing to inflate recoveries. 'If these losses have actually reduced, where is the on-ground evidence?' he asked, calling for a deep investigation into the claims. Consumers of KE, others: Govt to pass on Rs53.4bn relief under QTA for Q4'25 On the claims of CEP GEPCO of substantial growth in consumption of electricity industry, Member KPK, Maqsood Anwar said industrialists say that industry is closing due to higher tariffs. He further asked CEO to prepare himself in 15-20 minutes to reply further questions. However, neither the Authority asked any question him nor he courage to reply. He also astonished that how 49 per cent increase has been witnessed in power utilization by the industry in fourth quarter of FY 2024-25 as compared to same period of FY 2023-24. NEPRA's Mubashar Bhatti claimed that the impact of extra recovery was just Rs 3 billion as compared to the reference of NEPRA. The major impact was lower capacity charges, termination of contracts of six IPPs of Rs 17 billion, Rs 18 billion of Neelum Jhelum hydropower project capacity, in addition to reprofiling of debts of K-2 and K-3. He confirmed 46 per cent increase in electricity consumption in fourth quarter of FY 2024-25 as compared to corresponding period of FY 2023-24. Major increase was witnessed in LESCO, GEPCO, HESCO etc. The main reason of increase in industrial consumption was stated as CPPs shifting from gas to grid. Another factor was lower tariff in this quarter as compared to the corresponding quarter of FY 2023-24. 'With increase in rates of gas and imposition of levy forced CPPs to shift towards the grid,' Bhatti maintained. The participants expressed doubts on the claims of savings of Rs 780 billion during the fiscal year 2024-25 and their hunch was that most of the reduction related to overbilling and detections bills instead of efficiency gains. Member (Technical), Rafique Ahmad Shaikh enquired what drastic changes have been witnessed in the system that Discos performed extraordinarily well. He maintained that Nepra had detected a case of SEPCO in which it was found that the Discos had unleased massive detection bills to its consumers. 'Power Division should investigate that if losses have reduced in real terms or something was manipulated to show better performance,' said Member Technical. However, the representative of Power Division/PPMC, Naveed Qaiser stated that there was reduction in Technical and Commercial (T&C) losses in Discos. He further stated out of Rs 780 billion reduction in circular debt, the share of efficiency gains was Rs 242 billion whereas Rs 175 billion was on other accounts. He further stated that Discos reduced their loss by Rs 122 billion as compared to last year. He further contended that it was foreseen that since most paying consumers are shifting to solar, Discos will show loss of Rs 640 billion in FY 2024-25 as compared to Rs 590 billion of 2023-24. Five Discos have not only recovered the bills of FY 2024-25 but some Discos have also recovered arrears due to which their recovery was over 100 percent. Also economic parameters remained under control. He said the government will continue to charge existing DSS at the rate of 3.34 per unit to retire Rs 1.275 trillion loans to be taken from banks to retire circular debt. Rihan Jawed from Karachi expressed doubts on the claims of Power Division regarding losses and recovery. He opposed continuous recovery of DSS saying it will be a dragon industry. The chairman Nepra also raised eyebrows at Discos figures, sought an update from Power Division on previous inquiries contending it was a big issue and not limited to one Disco only i.e. Lesco. He enquired about the status of inquiries against some Discos launched by the Power Division on overbilling, the representative Power Division Mehfooz Bhatti said he would submit a reply to the Regulator. He said, inquiry report in case of Lesco has been completed and a report has been submitted to the prime minister. The Member Technical also directed Power Division to 'dig out the facts on ground and Nepra team will also investigate the claims of performance claims of Discos.' He maintained that Power Division should check data of PITC, which will be enough to prove overbilling or not. The Nepra's team also noted that huge backlog of new connections was seen in Discos, in addition to delay in permission of net metering. The Faisalabad Electric Supply Company (Fesco) was on the top whose backlog is of 4000 applications. Arif Bilwani, a businessman from Karachi said that almost all the Discos have claimed better performance in the year 2024-25 and a particularly astonishing performance in the last quarter which seems doubtful particularly when they are under investigation for over billing, detection billing, average billing etc in the recent past. He argued that enquiries conducted by Nepra and Power Division also revealed massive fudging of figures which was ordered to be reversed. Final report is still awaited. Still no proper mechanism exists for elimination of theft in all the consumer categories. And he questioned why the elimination of cross subsidy is still lingering, and how long the burden of lifeline and protected consumers will be borne? A businessman from Lahore, Aamir Sheikh stated that industry is very worried about the 19 percent extra tariff applied by America on Pak exports. It is imperative now for cost of production in Pakistan to be reduced and in this regard the biggest issue is electricity rates. He appealed for the cross subsidy borne by industry (which is reportedly more than Rs6/unit) to end. And maintained that industry wants the government to confirm that the Rs 1.71/unit reduction (in lieu of petroleum levy) will be continued and electric duty removed from July 1, 2025 onwards (as announced by Power Minister). Industry fears that after almost 14 percent increase in rates from July 1, 2025 rates will increase by another six percent after the next quarter when last year's QTA will end, he added. Energy expert Asim Riaz pointed out that the shifting of captive from gas to grid has caused a loss of Rs 242 billion to the gas sector but the benefit to the electric sector was apparently 10 times less than that. The government should reveal the exact benefit in rupees that has been achieved as apparently the country is a net loser by this move, he said adding that the gas levy was supposed to be used to reduce electricity rate but that has not been done. Tanveer Barry, representative of KCCI said that government claimed that after negotiations with IPPs a big relief for consumers will be evident but industry cannot see any big relief adding that there has been 10 percent decline in industrial power consumption in Karachi. US imposed 19 percent tariff on Pakistan while Bangladesh, Sri Lanka and Vietnam will face 20 percent however Pakistan will miss the opportunity because electricity rates are high compared to other developing countries. He said consumers still pay capacity payment of Rs 1.7 trillion or Rs 17/ unit which means 63 percent total projected power purchase price of Discos. 'We do not agree with the Power Division calculation of Rs 93 billion in cross subsidies in industrial power tariffs, the actual cross subsidy amounts to Rs 137 billion. Last month Power Division tried to stop negative FCA for Karachi but they could not and now Karachi FCA has been delayed for unknown reason. According to Power Division circular debt is going down so why is the government taking a loan to reduce circular debt. As per audit report Discos charged Rs 244 billion in overbilling. Industrial tariff can be reduced by abolishing time of use,' he said. Copyright Business Recorder, 2025
Express Tribune
23-06-2025
- Business
- Express Tribune
Ministry asks for delay in tariff relief for Karachi
The Ministry of Energy has sought delay in tariff relief for K-Electric (KE) consumers under a fuel cost adjustment (FCA) petition, arguing that it will impact uniform tariffs across the country. A public hearing was held on Monday and instead of deliberating on the negative FCA request filed by KE, the event became a tug of war between maintaining the uniform tariff and passing on the justified fuel cost relief to power consumers of Karachi. KE had filed a request for a reduction of Rs4.69 per unit in fuel charges for April 2025. If granted, this tariff adjustment will be the eighth successive monthly relief for consumers since September 2024. The energy ministry cited concerns about the impact on uniform tariffs, stating that there was a need to maintain fiscal discipline and avoid exacerbating financial challenges due to the ongoing International Monetary Fund (IMF) programme. It mentioned that the federal government had already allocated Rs21 billion in subsidies for FCA, which could be affected if any relief was granted at the current stage. National Electric Power Regulatory Authority (Nepra) Chairman Waseem Mukhtar responded firmly and expressed strong disapproval of the intervention during a public hearing. He was of the view that timing of the request was highly inappropriate. He raised questions about the relationship between fuel cost adjustments and subsidies, dismissing the ministry's concerns over uniform tariffs and asked where was such a mechanism. He emphasised that the FCA, by nature, should not be linked to subsidy decisions. He questioned what FCA treatment should be, if the authority agreed to defer the adjustment, considering the motions which could take up to six months before a decision was reached and whether the burden would be borne or passed on to consumers. Mukhtar also pointed to concerns over questions being raised about transparency in the authority's decision-making, adding that the upcoming billing cycle would be affected because of the confusion. KE CEO Moonis Alvi mentioned that the private power utility would comply with Nepra's decision, following the regulatory process, and ensure justice for consumers. He emphasised that the monthly negative FCA would have provided significant relief to Karachi industries and consumers and halting it now may not be justified. Drawing a comparison, Alvi pointed out that when KE's fuel cost adjustments were higher in the past, the concept of uniformity at the national level was not considered. FCA is a key part of the regulatory framework used to adjust electricity prices based on fluctuations in global fuel prices and changes in the electricity generation mix. While KE has already seen reductions in its monthly FCAs due to lower global fuel prices, this delay is seen as a direct interference in a process designed to benefit Karachi consumers. There are also concerns about the impact this delay could have on economic activities in the city, with customers already facing challenges from the high cost of energy. Moreover, the argument that this adjustment may interfere with the uniform tariff system is seen by many as a thinly veiled attempt to maintain control over pricing at the expense of the public. As of now, Karachi electricity consumers will have to wait at least another week to learn whether they will receive the much-needed financial reprieve. Nepra has confirmed that it will proceed with the hearing as soon as the ministry's objections are addressed and their letter will be uploaded on Nepra's website for stakeholders' visibility. It, however, remains unclear whether the delay will be extended further.
Business Recorder
05-06-2025
- 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
