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Nepra notifies consumers of Rs1.11 per unit higher fuel costs in Oct billing

Started 08 Oct, 10:44 2 events Updated 10h ago
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  1. Economic08 Oct, 10:44

    Nepra notifies consumers of Rs1.11 per unit higher fuel costs in Oct billing

    Islamabad, Pakistan

    ISLAMABAD: The National Electric Power Regulatory Authority (Nepra) on Thursday notified electricity consumers of an additional burden of Rs16 billion by allowing Rs1.11 per unit in higher fuel costs in October billing. In a notification, Nepra said it had decided that the “positive fuel cost adjustment (FCA) for August 2026, i.e. Rs1.1086/kWh … shall be applicable to all the consumer categories of K-Electric and ex-Wapda distribution companies (XWDISCOs), except lifeline consumers, electric vehicle charging stations and prepaid electricity consumers of all categories who opted for the prepaid tariff”. The regulator said the higher FCA would also be applicable to consumers under the incremental consumption package. DISCOs and KE are required to reflect the fuel cost adjustment for August 2026 in the October 2026 billing month. The Central Power Purchasing Agency (CPPA) had reported that the actual average fuel charges component for August 2026 amounted to Rs8.8265/kWh, against the reference fuel charges component of Rs7.0998/kWh approved in the applicable notified consumer-end tariff. Accordingly, it had demanded an additional FCA of Rs1.73 per unit for electricity consumed in August 2026. After certain adjustments, Nepra worked out the actual fuel component of the tariff at Rs8.2084, instead of Rs8.8265 as claimed by CPPA, thus allowing an additional FCA of Rs1.11 in October billing, instead of the Rs1.73 per unit demanded by CPPA. The higher additional fuel cost in August stemmed from expensive RLNG imports from the spot market, as contracted supplies from Qatar remained under force majeure, besides higher coal imports and lower-than-estimated availability of cheaper hydropower and nuclear generation. Hydropower was originally targeted to account for about 41 per cent of total power generation, but its share was slightly below 38pc, while the share of nuclear power was estimated at 16.4pc but turned out to be 10pc due to an outage at the Karachi’s nuclear power plants. As a consequence, the share of imported coal-based generation increased to 15.6pc, instead of 7.4pc as originally planned. Hydropower has no fuel cost, while the average nuclear fuel cost increased to Rs3.15 per unit due to lower utilisation, instead of Rs2.5 per unit. In contrast, the cost of imported coal-based generation came to Rs17 per unit. The cost of local coal-based generation was reported at Rs5.5 per unit. The cost of RLNG-based generation was reported at Rs45.93 per unit, even higher than the Rs45.25 per unit cost of furnace oil-based power generation, which also includes a petroleum levy of Rs73,000 per tonne. The FCA is reviewed every month under the tariff regime applicable across the country and is usually applicable to consumers’ bills for one month only. Under the tariff mechanism, changes in fuel costs are passed on to consumers only on a monthly basis through an automatic mechanism, while quarterly tariff adjustments on account of variations in power purchase prices, capacity charges, variable operation and maintenance costs, and use-of-system charges — including the impact of transmission and distribution losses — are built into the base tariff by the federal government.

    Dawn – Home
  2. Political10 Oct, 02:04

    Nepra clears use-of-system charges for competitive power market

    Islamabad, Pakistan

    ISLAMABAD: The Nat­ional Electric Power Reg­ulatory Authority (Nepra) on Friday notified use-of-system charges (UoSC) ranging from Rs6.23 to Rs19.62 per unit for bulk power consumers (BPCs) of all distribution companies, including K-Electric, participating in the competitive electricity trading market. Under the Competitive Trading Bilateral Contract Market (CTBCM), open-access consumers participating in the upcoming 400MW auction will have to pay Rs6.23 to Rs19.62 per unit to use the national grid for transporting electricity from the supplier to the consumer. The UoSC includes transmission and distribution charges, a fixed grid charge and cross-subsidy. A B-3 industrial consu­mer will be charged Rs6.23 per unit, while a B-4 industrial consumer will pay Rs9.09 per unit. These charges will be in addition to the electricity supply price, including generation cost, to be agr­eed between the private-sector supplier and the BPC. At present, there are a little over 3,000 BPCs across the country. The UoSC for C-3 and C-2 single-point distribution consumers has been notified at Rs14.95 to Rs19.62 per unit, while A-2 and A-3 general supply consumers will be charged Rs19.14 per unit. Agricultural consumers will pay Rs6.72 per unit. For BPCs not participating in the competitive wheeling auction, UoSC rates have been set significantly higher, ranging from Rs19.17 to Rs32.56 per unit, depending on the consumer category. In this category, B-3 and B-4 consumers will pay Rs19.17 and Rs25.45 per unit, respectively, while C-2 and C-3 consumers will be charged Rs31.30 and Rs32.56 per unit. A-2 and A-3 consumers will pay Rs32.08 per unit, while agricultural consumers will be charged Rs19.66 per unit. A fixed grid charge of Rs1 per kilowatt per month, based on sanctioned load, will also apply to both categories, irrespective of whether they participate in the competitive auction. The commercial market operation date for the CTBCM had already been declared as Jan 22, 2026, with the first market auction originally scheduled for June. However, the auction was delayed because UoSC charges had not been determined and notified. The notification of uniform UoSC rates for all distribution companies and K-Electric is intended to pave the way for the formal launch of the competitive wholesale electricity market. The Independent System Operation (Ismo), a new power division entity, is expected to auction 400MW of electricity in the first phase within the next couple of months. The government has allocated a total of 800MW for auction in two phases. Nepra had forwarded its UoSC determination to the government for uniform application after considering the views of the power division, Ismo, K-Electric and BPCs on the mechanism for calculating and settling the charges, including inter-Disco differentials, cross-subsidies and transmission and distribution losses. Under government directives, the impact of inter-Disco differentials arising from uniform UoSC rates will not be borne exclusively by wheeling consumers. Nepra had also circulated a draft adjustment mechanism for settling inter-Disco differentials among relevant stakeholders. The regulator said the key principle was to ensure that UoSC applicable to open-access consumers remained equal to those applicable to similarly pla­ced consumers of suppliers of last resort (SOLRs). Based on the transmission and distribution losses of individual Discos, Nepra determined a uniform loss factor of 8.04pc at the 11kV level. For consumers connected at 132kV, it approved a uniform loss factor of 1.51pc, as proposed by the power division. Nepra ruled that any additional charge required to cover differentials among Discos or K-Electric would apply to all consumers, including open-access consumers and those of SOLRs, thereby maintaining uniformity. The federal government had earlier approved framework guidelines for the competitive wheeling auction of 800MW of electricity and for moving towards integrated energy planning across the country. Under the framework, 800MW of generation capacity will be sold through competitive auctions for five years. The quantum could gradually increase after the initial trial, subject to government approval. Ismo will now hold the first 400MW auction under a process approved by Nepra a few days ago. It is also expected to announce the auction calendar and detailed procedure shortly. There will be no upper or lower limit on bid values, which will remain fixed for one year. According to timelines set under the IMF programme, approval of the auction guidelines had been targeted for December, while approval of uniform wheeling charges by Nepra was due in January 2026. Published in Dawn, October 10th, 2026

    Dawn – Home

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