By Staff Reporter
LAHORE: Pakistan’s state-owned Water and Power Development Authority (Wapda) has proposed a 91% increase in its total revenue requirement, including hydel levies, to Rs364.872 billion for the fiscal year 2025-26, up from Rs190.909 billion set by the National Electric Power Regulatory Authority (Nepra) for 2022-23, according to a tariff petition filed with the regulator.
The filing, scheduled for a public hearing by Nepra on September 11, 2025, reflects Wapda’s push to cover escalating costs across multiple categories, including operations, depreciation, and returns on investment for its hydropower projects.
The proposed hike comes as Pakistan grapples with persistent energy challenges and rising infrastructure costs, with implications for electricity tariffs and provincial revenue-sharing arrangements.
Wapda’s petition outlines significant increases in key expense categories. Operation and maintenance (O&M) costs are projected to rise 66.7% to Rs39.792 billion in 2025-26 from Rs23.749 billion in 2022-23. Depreciation expenses are set to increase 16.6% to Rs8.668 billion from Rs7.494 billion over the same period.
The authority is also seeking a 9% increase in return on investment (RoI) for power stations, requesting Rs32.011 billion for 2025-26 compared with Rs29.453 billion in 2022-23. More notably, RoI for power projects is projected to surge 172% to Rs99.642 billion from Rs36.771 billion, driven by expanded capital works and development initiatives. Other income is expected to grow modestly to Rs772 million from Rs535 million.
Collectively, these cost heads contribute to a proposed 85% increase in Wapda’s core revenue requirement, excluding levies, to Rs179.141 rupees from Rs96.933 billion.
Wapda’s petition includes claims for prior regulatory gaps, totaling Rs22.352 billion for 2022-23, Rs56.038 billion for 2023-24, and Rs60.975 billion for 2024-25, though no new regulatory gap is proposed for 2025-26.
When combined with these earlier claims, Wapda’s total revenue requirement, excluding hydel levies, rises 165.5% to Rs318.507 billion from Rs119.962 billion in 2022-23. For Net Hydel Profit (NHP) payments, Wapda has proposed Rs29.526 billion for Khyber Pakhtunkhwa (slightly down from Rs30.027 billion in 2022-23), Rs11.969 billion for Punjab (up from Rs11.867 billion), Rs5.086 billion in water usage charges for Azad Jammu & Kashmir (up from Rs4.222 billion), and Rs158 million for the Indus River System Authority (marginally up from Rs156 million).
Nepra’s 2022-23 tariff determination set interim NHP rates at Rs1.548 per kilowatt-hour for Khyber Pakhtunkhwa and Rs1.474 per kilowatt-hour for Punjab, pending a decision by the Council of Common Interests (CCI) on indexation.
Wapda’s latest petition maintains these rates for 2025-26, with no adjustments proposed until the CCI resolves the indexation issue. Similarly, the water usage charge for Azad Jammu & Kashmir remains unchanged at Rs1.10 per kilowatt-hour, as set by Nepra in 2022-23, pending CCI guidance.
Wapda’s estimated net generation for 2025-26 is 31,563 gigawatt-hours, a slight increase from 31,286 gigawatt-hours in 2022-23. The authority’s calculations for its regulatory asset base (RAB) for development projects are based on average capital works in progress, excluding interest during construction and grants.
Nepra’s benchmark debt-to-equity ratio of 80:20, established in 2015-16, is applied in the petition, aligning with the regulator’s standards rather than Wapda’s actual financing structure.
Under Nepra’s Tariff Standards & Procedures Rules, 1998, interested parties may file intervention requests or submit comments on the petition, which the regulator may consider in its final determination.
The September 11 hearing will provide a platform for stakeholders to weigh in on Wapda’s proposed tariff adjustments, which could influence electricity costs for consumers and revenue distributions to provinces.
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