ISLAMABAD: The Federation of Pakistan Chambers of Commerce and Industry (FPCCI) has raised serious objections to the government’s proposed formula for the uniform application of Use of System Charges (UoSC) across the country, warning that the framework could undermine the viability of open-access electricity for industry.
In a letter to the Chairman National Electric Power Regulatory Authority (NEPRA), FPCCI, through its Energy Advisory Committee, formally placed on record its concerns regarding the proposed UoSC presented during the recent public hearing.
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According to FPCCI, the proposed wheeling charges—ranging from Rs8.83 to Rs22.45 per kWh—are commercially untenable in their current form, as they bear little relationship to the actual cost of transmission and distribution infrastructure use. The federation cautioned that such pricing would render open-access electricity procurement non-viable for Pakistan’s industrial and export sectors.
FPCCI further contended that the Debt Servicing Surcharge (DSS) of Rs3.23 per unit has no legal basis within the current proceedings, as it does not appear in the Federal Government’s formal motion submitted to NEPRA. Imposing a charge not sought by the petitioner, it argued, would make wheeling economically unfeasible and must therefore be excluded from the determination.
The federation also objected to the cross-subsidy component embedded in the proposed industrial UoSC, stating that it directly contradicts the Cabinet’s February 2026 decision—issued on the Prime Minister’s directives—to eliminate cross-subsidies from industrial tariffs. FPCCI maintained that inclusion of such a component is inconsistent with stated government policy and must be removed, particularly for B3 and B4 consumer categories.
Highlighting structural concerns, FPCCI stressed that UoSC must be formula-based and fixed over a long-term regulatory period. It warned that the current framework lacks any cap or legal protection against future revisions through Cabinet directives, creating significant uncertainty for investors.
“Banks and lenders will not finance new generation projects in a market where the single most critical cost variable is uncapped and subject to change at any time,” FPCCI stated, terming the issue not merely a policy concern but a serious market failure risk. Without regulatory certainty, it added, projects under the Competitive Trading Bilateral Contract Market (CTBCM) would struggle to achieve financial close, discouraging much-needed investment in Pakistan’s power sector.
FPCCI has urged NEPRA to address these concerns comprehensively before issuing its final determination.
Copyright Business Recorder, 2026
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