ISLAMABAD: National Electric Power Regulatory Authority (Nepra) has approved a revised market operation fee for the Central Power Purchasing Agency-Guarantee (CPPA-G) for the fiscal year 2025-26, following detailed scrutiny of its petition and cost projections.
According to Nepra’s determination issued on June 29, 2026, the regulator reviewed CPPA-G’s request for a fee of Rs14.67 per kW per month and associated revenue requirements, ultimately allowing adjustments after evaluating various cost components, including salaries, administrative expenses, training, and hiring plans. However, the Regulator has allowed MOF Rs 10.5248/kW/ per month.
CPPA-G had filed its petition under the Nepra Tariff Standards and Procedure Rules, 1998, seeking approval of its operational fee along with provisions for prior year adjustments (PYA), miscellaneous legal costs, and expenditure actualisation based on audited accounts.
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The agency projected a total net revenue requirement of up to Rs4.664 billion, factoring in general establishment costs, administrative expenses, capital expenditure, taxes, and adjustments. The requested fee translated into Rs14.67 per kW per month compared to a lower base calculation of Rs9.08 without adjustments.
Nepra conducted a public hearing on December 23, 2025, to ensure transparency and stakeholder participation. However, no objections or comments were received from stakeholders, allowing the authority to proceed based on submitted data and internal evaluation.
Nepra, has however, ignored comments of intervenors in its decision as the Regulator said that it has not received any comments. The intervenors have registered protest that their viewpoints have been ignored.
A major portion of CPPA-G’s request related to employee salaries, benefits, and human resource expansion. The company argued that approximately 75 percent of its workforce comprises highly skilled professionals responsible for managing power purchase invoices worth over Rs4 trillion, necessitating competitive compensation structures.
After detailed assessment, Nepra allowed an increase of 10.49 percent in salaries and wages for FY2025-26, slightly lower than the 11 percent increase requested by CPPA-G. The regulator approved Rs1.585 billion under this head, excluding the impact of employees who had resigned or been transferred.
Employee benefits linked to salaries were approved at Rs249 million. However, Nepra curtailed CPPA-G’s proposed bonus payments, allowing only one basic salary amounting to Rs55.64 million instead of the requested 1.5 gross salaries.
On hiring plans, CPPA-G had sought significant allocations for recruitment, including replacement of resigned staff and expansion in technical and IT departments. The company highlighted the need for additional workforce to support digital transformation, data analytics, cybersecurity, and system modernisation initiatives.
The authority reviewed these proposals and approved Rs109.71 million for new hiring, based on 26 positions already filled, while directing that any further recruitment would be considered in future tariff petitions.
Training and capacity building expenses also came under scrutiny. While CPPA-G requested Rs32 million to support technical and leadership development programmes, Nepra allowed only Rs8.58 million, aligning with actual expenditures and considering reduced requirements after segregation of the market operator function.
The determination also examined consultancy services, administrative costs, and operational expenditures, ensuring that only justified and prudent expenses were included in the approved fee structure.
Nepra emphasised that CPPA-G’s costs ultimately impact end-consumer tariffs, underscoring the need for careful evaluation and cost optimisation. The authority reiterated its commitment to maintaining a balance between operational efficiency and consumer protection.
The decision has been forwarded to the federal government for notification in the official Gazette within 30 days, failing which Nepra will issue the notification itself.
Nepra has further issued the following directions to CPPA-G: (i) to file its next tariff petition immediately under Multi-Year Tariff (MYT) regime; (ii) submit its Power Purchase Price (PPP) forecast report updated every year after accounting for upcoming addition in Generation, changes in demand pattern, and other variables like exchange rate parity, changes in local/ US CPIs, LIBOR/ KIBOR and IGCEP etc., for consideration of the Authority; (iii) continue sharing its HR development progress at the end of each quarter and also include therein, department wise detail of employees, functions being performed by each department and plans for future recruitment, if any, along-with their proposed IDs etc., in its HR Report; (iv) apprise the Authority regarding its plans for future recruitment, along-with their proposed IDs etc., before making any such hiring; (v) provide composition of its Board of Directors, with brief profile of each member, basis of their appointment and their roles and responsibilities; (vi) ensure provision of monthly information to the Authority in terms of energy generated, energy capacity & other charges, and payments etc. as per the prescribed formats, already shared with the Petitioner, including fuel stocks held at each power plant on monthly basis. CPPA-G is also directed to submit complete details for deviation from Economic Merit Order (EMO), showing hourly generation along-with financial impact for deviation from EMO, and the reasons thereof, in coordination with NPCC, and within the given timelines, as also directed by the Authority in the monthly FCA decisions, while submitting the monthly FGA data; (vii) submit monthly reconciliation report of the T&T losses with NGC; (viii) provide the detail of all legal cases against various entities including international arbitrations and their status and also those cases filed against Nepra as part of Quarterly adjustment; (ix) provide monthly report regarding LDs imposed on Generation Companies along with reasons; and (x) seek prior approval of the Authority, for making any expenditure beyond the allowed cost for the FY 2025-26, under any head of account.
Copyright Business Recorder, 2026
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