August power bills: Nepra increases FCA to generate additional Rs9.8bn

ISLAMABAD: The National Electric Power Regulatory Authority (Nepra) has approved a positive adjustment of Re0.75 per unit in the Fuel Charges Adjustment (FCA) for Discos and K-Electric (KE) to recover an additional Rs9.8 billion from consumers for June 2026.

The regulator conducted a public hearing on July 29, 2026. The Central Power Purchasing Agency-Guaranteed (CPPA-G) had sought a higher positive adjustment of Rs1.20 per unit, based on an actual FCA of Rs8.9138 per unit, to recover Rs15.68 billion, primarily due to the higher cost of RLNG.

During the hearing, the authority sought details on measures being taken to avoid future increases in FCA.

READ MORE: Govt may increase June FCA by Rs1.20 per unit

The Independent System and Market Operator (ISMO) informed that generation during June 2026 was optimised in view of south-north transmission constraints. Cheaper generation sources—including nuclear, gas, local coal, and imported coal—were dispatched to their maximum feasible limits before resorting to RLNG-based plants.

ISMO further stated that following the commissioning of the Lahore North transmission project, evacuation through the HVDC system increased by around 300–400 MW, reaching an average of 4,200–4,300 MW. Nepra directed ISMO and the National Grid Company (NGC) to provide timelines for resolving these constraints before the next hearing.

The authority expressed concern over partial loading charges amounting to Rs4.9 billion and sought CPPA-G’s strategy to minimise them. CPPA-G explained that these charges were not due to inefficiencies but resulted from reduced daytime demand caused by increased rooftop solar generation. Power plants were operated at partial load during solar hours and ramped up later to meet evening peak demand.

Nepra noted that partial loading charges in June 2026 were approximately Rs1 billion higher than in June 2025. ISMO added that shutting down plants to avoid such charges would instead lead to significant start-up costs.

Member Khawar Hanif pointed out that ISMO had earlier been directed to present the financial impact of Guddu 747 operating in open-cycle mode since 2021, along with reasons for deviations from the annual production plans of Haveli Bahadur Shah, Bhikki, and Balloki RLNG plants, and the status of the Electricity Market Operator (EMO).

ISMO responded that Guddu 747 generated 194.31 GWh in open-cycle mode, compared to a potential 322 GWh in combined-cycle mode, reflecting a shortfall of about 128 GWh and a financial impact of approximately Rs300 million. It further stated that against a demand of 500 MMCFD, only 421 MMCFD of gas was allocated, of which 356 MMCFD was utilised due to operational and system stability constraints. Deviations from merit order were attributed to transmission constraints, avoidance of start-up costs, and system requirements. Nepra directed ISMO to submit detailed explanations in writing.

Member Arif Bilwani raised concerns over losses due to the non-operation of the Neelum-Jhelum Hydropower Project and Guddu plant in combined-cycle mode. The Ministry of Energy (Power Division) responded that restoration of Neelum-Jhelum and combined-cycle operation of Guddu would benefit consumers, and an impact report would be submitted.

Responding to queries regarding the Pehur hydropower project, the Ministry clarified that it does not have a contract with CPPA-G and instead operates under a bilateral arrangement with PESCO, with its energy accounted for in PESCO’s basket.

On reduced nuclear generation, ISMO explained that K-3 was on partial outage due to reactor issues, while Chashma C-2 and C-4 also faced forced outages. CPPA-G added that continuous plant operations can lead to technical issues, and nuclear outages involve complex technical considerations being addressed by relevant entities.

Regarding lower gas-based generation in June 2026 compared to June 2025, the Ministry stated that RLNG shortages—partly due to the prevailing international situation—led to avoidance of costly spot cargoes. RFO and HSD plants were dispatched only when necessary for system stability.

Nepra, however, determined the FCA impact at Re0.7503 per unit, significantly lower than CPPA-G’s request. The approved adjustment will be reflected in consumer bills for August 2026.

Copyright Business Recorder, 2026