Losses shifted to high-theft areas: Nepra sees no ‘real improvement’ in Discos’ performance

ISLAMABAD: The National Electric Power Regulatory Authority (Nepra) on Wednesday observed that there has been no ”real improvement” in the performance of power Distribution Companies (Discos), particularly in reducing losses, alleging that losses have merely been shifted to high-theft areas.

The observation was made by Nepra Member (Development), Engineer Maqsood Anwar Khan, during a public hearing on the Fuel Charges Adjustment (FCA) for June 2026.

The remarks came after Chief Financial Officer (CFO) of the Power Planning and Monitoring Company (PPMC), Naveed Qaiser, claimed that Discos’ performance had improved during FY2025-26.

READ ALSO: DISCOs & KE: Consumers to get Rs1.99 relief in June, July & August bills: Nepra

The hearing was presided over by Nepra Chairman Waseem Mukhtar, along with Member (Tariff & Finance) Amina Ahmed and Member (Development) Maqsood Anwar Khan. Officials from the Power Division, including representatives of CPPA-G, ISMO and PPMC, also attended.

The Central Power Purchasing Agency-Guarantee (CPPA-G) has sought a positive FCA adjustment of Rs1.20 per kWh for June 2026 to recover an additional Rs15.68 billion from consumers of Discos and K-Electric.

Consumers had already paid a positive FCA of Rs0.34 per kWh in July 2026; with the new adjustment, the net increase will be Rs0.86 per kWh, to be charged in August 2026.

During the hearing, the PPMC CFO attributed a 3.3 percent decline in electricity consumption in June 2026 to Eid holidays and relatively lower temperatures compared to the same month last year. However, his explanation was rejected by a Member, Nepra.

“I am not ready to accept this argument. There were protests in June due to prolonged power outages. Discos deliberately suppressed consumption; otherwise, temperature trends would not justify such a decline,” said Maqsood Anwar Khan.

He further noted that areas where load shedding is linked to recovery witnessed outages of up to 22 hours, leading to public protests.

Responding to a query, the PPMC CFO revealed that the Power Division is preparing another package of cheaper electricity aimed at boosting consumption, which will be submitted to Nepra after approval from relevant forums.

The authority also raised concerns over transmission constraints, which are preventing cheaper electricity generated in the southern region from being fully transmitted to the north. Divergent views between officials of the National Grid Company (NGC) and ISMO on the issue were also noted.

On another question, the CFO acknowledged that two major projects — the 969 MW Neelum-Jhelum Hydropower Project and the 747 MW Guddu Combined Cycle power plant — remained shut due to negligence, suggesting that responsibility should be fixed.

Regarding the Quarterly Tariff Adjustment (QTA) for April–June 2026, the CFO estimated an impact of Rs17–18 billion, translating into around Rs0.70 per unit. However, a Nepra case officer pointed out that Discos had sought a higher adjustment of Rs23 billion, prompting the CFO to state that the figures of PPMC and CPPA-G were aligned and that Discos’ data required verification.

During the hearing, Aamir Sheikh, representing the textile sector, warned that the combined impact of QTA and FCA could raise industrial tariffs by Rs2.5 to Rs3 per unit — nearly a 10 percent increase. He argued that the industry was not opposed to higher tariffs driven by global developments, including the Gulf conflict, but sought transparency in presenting the actual cost drivers.

The PPMC CFO, however, disagreed, maintaining that industrial tariffs in August would remain lower than pre-US-Iran conflict levels despite the proposed adjustments.

Another participant, Rehan Javed, suggested that the incremental consumption package should be redesigned in consultation with industry stakeholders, with incremental units ring-fenced to prevent cross-subsidisation.

He said that in 2003, Pakistan’s electricity tariff was around 7 US cents per unit despite the system relying heavily on furnace oil and diesel generation, with many of today’s high-efficiency plants not even in operation.

After investing billions of dollars in modern, efficient generation, consumers are still paying substantially higher tariffs than two decades ago. This raises serious questions about whether the promised efficiency gains have translated into lower consumer prices. This version attributes comments simply to Nepra, as requested.

Tanveer Barry, representing KCCI, questioned why electricity generated from expensive fuels such as furnace oil and high-speed diesel (HSD) had increased.

He attributed the higher FCA to unplanned outages and greater reliance on costly fuels, noting that gas-based generation declined from 968 GWh in 2025 to 867 GWh in 2026 — a drop of about 10 percent.

Nepra Chairman Waseem Mukhtar, who was on Zoom, sought clarification on transmission constraints and their removal timeframe. He also directed that a comprehensive study be conducted to identify ways to reduce the financial impact of power plants operating in start-up mode.

Copyright Business Recorder, 2026