The National Electric Power Regulatory Authority (NEPRA) has approved an additional charge of Rs1.743 per unit for electricity for three months starting from September 2024. This decision allows distribution companies and K-Electric to recover Rs43.23 billion through quarterly adjustments for the fourth quarter of FY2023-24 (April to June).
This increase will affect customers of state-owned distribution companies and K-Electric, further raising energy costs for households. Of the total amount, Rs21.253 billion will cover capacity charges paid to independent power producers (IPPs), while Rs7.368 billion will be recovered in system usage charges and market operator fees, Rs11.23 billion due to transmission and distribution losses, and Rs3.5 billion for variable operation and maintenance costs.
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Additionally, the imposition of an 18% GST on the recovery amount will further increase the burden by Rs7.78 billion, bringing the total recovery from consumers to Rs51 billion.
In a public hearing on August 26, Nepra Chairman Waseem Mukhtar reviewed the petition from distribution companies (Discos), who attributed the adjustments to lower-than-expected sales during the quarter. Nepra also noted that some companies, like Peshawar Electric Supply Company (Pesco), opted for load shedding, which reduced their share of capacity charges but also lowered sales. These companies had sought a Rs1.9/unit increase.
The Central Power Purchasing Agency (CPPA) requested Rs51 million for legal fees, but Nepra rejected this, stating that these costs are already included in the Market Operation Fee (MOF). The authority also excluded Rs72.23 million claimed for Kot Addu Power Company (Kapco) and Rs73.18 million charged by the CPPA for PPIB fees, deferring those matters for further review.
Ultimately, NEPRA approved a positive adjustment of Rs43.23 billion for variations in capacity charges, variable O&M, incremental sales recovery, system usage, market operator fees, and FCA impact on T&D losses for the fourth quarter of FY2023-24. The charges will be applied at a uniform rate of Rs1.7432/unit to all consumer categories, except lifeline consumers, from September to November 2024.
