In Islamabad, the National Electric Power Regulatory Authority (Nepra) is set to implement a substantial increase in its annual and one-time registration fees for all licensees involved in electricity generation, distribution, transmission, trading, operation, and supply. This decision mirrors the actions taken by power companies, which have been regularly raising electricity rates based on factors such as fuel cost, quarterly adjustments, base tariff adjustments, equalization surcharge, and financing cost surcharge.
Simultaneously, Nepra is proposing the introduction of an annual fee for upcoming electricity traders, calculated based on per megawatt forecasted energy trade. This move is in anticipation of the Competitive Trading Bilateral Contracts Market (CTBCM) becoming operational shortly. The existing fee structure, established on May 31, 2021, will be subject to revision pending input from stakeholders, including current and prospective licensees. The updated rates are expected to come into effect from July 1, 2024. Among the notable changes is a significant increase, approximately 215,000%, in the annual fee for Special Purpose Transmission Line (SPTL). The new rate is proposed to be Rs5.37 million per megawatt (MW), a substantial hike from the current Rs2,500 per MW. The maximum annual fee for SPTL is set to increase to Rs21.50 million from Rs10 million, marking a 115% rise.
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Similarly, the annual fee for generation companies is expected to surge by about 125%, with a proposed rate of Rs44,786 per MW compared to the current Rs20,000 per MW. The national grid company will face a fixed annual fee of Rs21.50 million, up 115% from the existing Rs10 million. Provincial grid companies, which currently pay a fixed annual fee of Rs2.5 million, may see this increase to Rs5.3743 million, representing a significant 115% rise. K-Electric, the major electricity provider in Karachi, is set to experience a 115% increase in its annual transmission license fee, rising to Rs15.048 million from Rs7 million.
Additionally, distribution license fees are proposed to be revised to Rs13,973 per MVA (megavolt amperes), with a maximum fee of Rs2.58 million, marking a substantial 115% increase from the current Rs6,500 per MVA or a maximum of Rs1.2 million. Market and system operators will now face a fixed annual fee of Rs21.50 million, up by 115% from the current Rs10 million.
Furthermore, Nepra intends to introduce three new annual charges for different types of regulatory registrations. An annual fee of Rs19.42 million each is suggested for independent auctions for suppliers of last resort, competitive bidding for new capacity, and administration of existing long-term power procurement contracts before CTBCM operations. Another Rs1.942 million fixed fee will be applied to any other electric power service.
A novel fee structure is also unveiled for electric power traders, with an annual fixed fee ranging from Rs948,060 for capacities up to 50MW to Rs9.48 million for capacities exceeding 1,000MW. These changes align with Nepra’s proposed amendments to its regulations, accommodating the inclusion of electricity traders as the market gradually opens to multiple suppliers beyond the existing monopolies of distribution companies and KE, with these entities assuming new roles as suppliers of last resort.
