ISLAMABAD: The National Electric Power Regulatory Authority (Nepra) has approved a cumulative revenue requirement of Rs332.3 billion for the National Grid Company (NGC) for three financial years—2022-23, 2023-24 and 2024-25 — under the Use of System Charges (UoSC) regime, while directing the company to immediately file its next Multi-Year Tariff (MYT) petition.
NGC, formerly known as the National Transmission and Despatch Company (NTDC), had sought a significantly higher multi-year tariff, projecting a steep rise in transmission costs. In its petition, the company requested Rs112.4 billion for FY2022-23, Rs163.4 billion for FY2023-24, and Rs202.5 billion for FY2024-25.
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The proposed tariff included major cost components such as depreciation, financial charges, pension liabilities, and prior-year adjustments, with the latter showing a notable increase during the control period. Nepra admitted the petition and conducted public hearings after inviting comments from key stakeholders, including CPPA-G, APTMA, the Punjab Power Development Board, and the Ministry of Planning.
After scrutiny, the authority allowed significantly lower revenue requirements: Rs81.466 billion for 2022-23, Rs95.604 billion for 2023-24, and Rs155.230 billion for 2024-25. The system-wise coincidental Maximum Demand Indicator (MDI) was approved at 17,765 MW, 17,512 MW, and 18,213 MW for the respective years.
Nepra also determined UoSC rates at Rs382.15 per kW per month for 2022-23, Rs454.94 per kW per month for 2023-24, and Rs710.25 per kW per month for 2024-25.
However, Member Tariff and Finance, Amina Ahmed, dissented on the treatment of Rs19.752 billion shown as payable to CPPA-G in NGC’s FY2023-24 financial statements. She argued that the authority’s decision to treat the amount as a loan — thereby reducing the company’s equity base — had led to a lower permissible return, a position she did not support.
During proceedings, Nepra examined multiple aspects, including operational expenditures, return on equity, prior year adjustments, transmission losses, and system efficiency measures.
The All Pakistan Textile Mills Association (APTMA) raised serious concerns, warning that the increased revenue requirement could translate into an electricity tariff hike of Rs1.5 to Rs2.5 per unit. The association cautioned that such an increase, coupled with existing tariff pressures, could erode the competitiveness of export-oriented industries.
In its 43-page determination, Nepra issued a series of directives to NGC, emphasising regulatory compliance, operational efficiency, and transparency. The Authority instructed NGC to submit its next MYT petition without delay, warning of regulatory action in case of non-compliance.
NGC has been directed to continue filing tariff petitions based on system-wide coincidental MDI and to provide quarterly updates on its implementation through CDP metering data validated via the Market Settlement Process.
The regulator also asked NGC to submit a third-party independent study on transmission and transformation (T&T) losses, including auxiliary consumption, in line with Nepra-approved Terms of Reference. The findings will be used to firm up loss benchmarks for the current control period.
Nepra further directed NGC to expedite completion of the SCADA-III project by September 2026, resolve financial and administrative bottlenecks in coordination with the Asian Development Bank (ADB), and ensure improved contract management. Quarterly progress reports on the project have been made mandatory.
The authority also stressed timely execution of the Transmission Investment Plan (TIP), requiring NGC to submit quarterly progress reports and highlight any cost or time overruns for prudence review.
On institutional reforms, Nepra directed NGC to ensure effective implementation of the Business Transfer Agreement (BTA), including timely reconciliation of receivables, payables, and inter-entity balances. Any unresolved issues must be reported to the authority along with a resolution plan.
The NGC has also been instructed to ensure efficient utilisation of loans from development partners, provide quarterly updates on the loading of its 500 kV and 220 kV systems, and report monthly progress on power evacuation from major generation projects, including wind, solar, and hydel sources.
The authority emphasised the need for timely evacuation of electricity from upcoming plants and mandated installation of a Secured Metering System (SMS) at all remaining Common Delivery Points.
Nepra further directed NGC and the Independent System and Market Operator (ISMO) to maintain segregated and auditable accounts during the transition phase, with ISMO required to independently file its revenue requirements from FY2025-26 onwards.
Strict compliance with the Grid Code, improved risk management, and transparent operational records—including dispatch instructions and outages—have also been mandated. Persistent non-compliance, the authority warned, would invite enforcement action.
Additionally, NGC has been directed to engage a third-party firm to monitor investments approved by Nepra. The firm will submit annual audit reports at least 45 days before tariff filings, with associated costs to be separately disclosed.
Finally, Nepra instructed NGC to execute Transmission Service Agreements (TSAs) with DISCOs, K-Electric, and other stakeholders to clearly define responsibilities and enhance governance and accountability in transmission services.
Copyright Business Recorder, 2026
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