Monthly tariff adjustment: Discos, KE consumers to bear Rs2/unit extra burden

ISLAMABAD: Consumers of Discos and K-Electric are to bear additional financial burden of about Rs 2 per unit for the August 2025 under the monthly tariff adjustment mechanism.

The National Electric Power Regulatory Authority (NEPRA) held a public hearing on September 30, 2025, which was attended by representatives of the business community and the media.

Nepra’s determination, issued on Tuesday, indicates that a negative adjustment of Rs 1.79/kWh for September 2025 will end, and a positive adjustment of Rs 0.0796/kWh will be applied.

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This will result in a net positive impact of about Rs 2.0 /kWh, including GST, for consumers of both Discos and K-Electric, to be recovered in the bills for October 2025. This will be in addition to the Debt Service Surcharge (DSS) of Rs 3.23/kWh.

Member (Technical) Rafique Ahmad Shaikh, in his additional note, stated that during the proceedings for the monthly fuel charges adjustment for August 2025 in respect of Discos, the persistence of inefficiencies within the sector once again came to the forefront of the Authority’s attention. He observed that the operation of the Guddu 747 MW power plant in open-cycle mode during the reference month imposed an additional financial burden of approximately Rs 956 million. Moreover, Part Load Adjustment Charges (PLAC) surged to Rs 3.9 billion.

He said system constraints further added a financial impact of Rs 451 million, while the utilization of the HVDC system remained at only 51percent, despite consumers being charged for full capacity. Each of these factors highlights significant inefficiencies that not only increase the financial burden on consumers but also compromise overall system efficiency.

According to him, the regulatory framework mandates that the Authority allow only prudent costs to be passed on through tariffs. For a considerable period, the Authority has afforded sector entities adequate time to rectify these inefficiencies. Unfortunately, the required improvements have not materialized, leading to a continuous financial strain on the power sector, the broader national economy, and ultimately, on household consumers.

“In my recent note, I explicitly stated that the costs arising from inefficiencies should not be passed on to consumers. I am of the considered view that it is neither just nor prudent to pass on the costs arising from the inefficiencies of sector entities to consumers who bear no responsibility for such operational shortcomings. Therefore, in my considered opinion, this fuel adjustment decision should strictly allow only the recovery of prudent costs, excluding any costs attributable to inefficiencies.”

In his dissenting note, he disagreed with the majority decision to shift the burden of inefficiencies — specifically those attributable to NTDC (now NGC) — onto electricity consumers, who bear no responsibility for these systemic failures.

Copyright Business Recorder, 2025