Power users set to pay higher bills as regulator weighs quarterly tariff hike

Power users set to pay higher bills as regulator weighs quarterly tariff hike

By Staff Reporter

ISLAMABAD: Electricity consumers are poised to face an additional 42 paise per unit in their bills from April through June, driven largely by capacity payments to power producers during the October-December quarter of fiscal 2026.

The National Electric Power Regulatory Authority, or Nepra, has scheduled a public hearing for Feb. 17 to review a request from former Water and Power Development Authority distribution companies, known as Discos, to recover Rs10.832 billion from customers under the quarterly tariff adjustment mechanism. If approved, the positive adjustment would translate to roughly 42 paise per unit spread across three billing months.

The move comes as consumers are already shouldering a 33 paise per unit increase stemming from Rs6.06 billion in elevated costs during the July-September 2025 quarter, which has been in effect since December and is set to expire at the end of this month. That earlier surcharge would give way to the new one, maintaining pressure on household and business budgets amid persistent energy sector challenges.

Discos are seeking the adjustments to cover capacity charges, transmission fees and market operator costs, as well as the effects of a government-backed incremental consumption package for industrial and agricultural users over three years. The request also accounts for the impact of transmission and distribution losses on monthly fuel expenses and variable operations and maintenance charges for the October-December 2025 period.

Capacity charges alone account for a hefty 24.25 billion rupees in additional outlays for the quarter. But these are offset by negative adjustments in other areas, including Rs1.655 billion in variable operations and maintenance, Rs3 billion in use of service charges, Rs7.5 billion tied to the incremental package, and Rs1.2 billion from fuel cost adjustment impacts due to system losses. The net result pares the total recoverable amount to Rs10.83 billion.

Not all Discos are pushing for increases. Three of the 11 — Hyderabad Electric Supply Co., Peshawar Electric Supply Co. and Quetta Electric Supply Co. — have requested negative adjustments of Rs3.5 billion, Rs5.1 billion and Rs4.1 billion, respectively, reflecting lower-than-expected costs in their regions.

By contrast, Multan Electric Power Co. is seeking the largest hike at Rs5.6 billion, followed by Gujranwala Electric Power Co. at Rs4.8 billion, Islamabad Electric Supply Co. at Rs4.1 billion, Lahore Electric Supply Co. at Rs3.7 billion, Sukkur Electric Power Co. at Rs2.9 billion and Faisalabad Electric Supply Co. at Rs1.9 billion.

The newer entities, Tribal Electric Supply Co. and Hazara Electric Supply Co., are asking for smaller recoveries of Rs303 million and Rs140 million. Any approved quarterly adjustment would extend to customers of K-Electric Ltd., the utility serving Karachi. However, quarterly tariff adjustments, debt service surcharges and negative fuel cost adjustments do not apply to consumers eligible under the government’s special tariff package for incremental consumption, offering some relief to targeted industrial and agricultural sectors.

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