August’s power bill looked considerably more expensive than it eventually turned out to be. But the regulator’s decision has not removed the underlying problem. It has merely separated genuine fuel pressure from a sizeable pile of previous-period adjustments.
Nepra has allowed a positive fuel cost adjustment of Rs1.11 per unit for August, considerably below the Rs1.73 per unit sought by CPPA-G. The regulator cut the claim by Rs17.28 billion, including a Rs15.74 billion downward adjustment related to RLNG-based plants. The approved FCA will be reflected in October bills for eligible consumers.
That distinction matters because August itself was hardly an easy month for the power system.
Generation stood at 14.94 billion units, 3.3 percent above the reference level. But the composition of that generation was far from what planners had assumed. Imported coal generated 2.33 billion units against a reference of 1.08 billion. Its share consequently jumped to 15.6 percent from a reference of 7.4 percent.
RLNG went in the opposite direction. Generation was 1.31 billion units against 1.76 billion in the reference mix, a shortfall of 26 percent. At Rs45.93 per unit, RLNG-based generation was also exceptionally expensive. Nuclear generation was another weak spot, falling 36 percent below reference to 1.53 billion units.
So, the system had to do something rather expensive to keep up with demand. It substituted away from RLNG and nuclear and leaned much harder on imported coal.
This is where the changing demand curve matters.
Pakistan’s grid is no longer dealing with the demand profile it was designed around. Industrial consumers that had shifted to captive generation are returning to the grid, while behind-the-meter solar continues to suppress daytime demand. The result is a deeper midday trough and a sharper evening ramp.
The regulator’s own hearing record effectively confirms the industrial side of the story. PPMC attributed the increase in demand primarily to captive consumers shifting back to the grid, alongside higher industrial demand under the Industrial Consumption Package.
The problem is that the generation fleet is being asked to respond to this new shape of demand with a fuel mix that is itself becoming less flexible.
RLNG should be doing much of the evening balancing. Instead, the war-related disruption to LNG supplies has kept its availability below reference for months. Pakistan has managed to secure cargoes, but not enough to restore RLNG generation to planned levels. Expensive spot cargoes have therefore become increasingly important.
The system has consequently leaned on imported coal. That may keep the lights on, but it is hardly a cheap solution.
The August FCA decision makes this distinction particularly important. CPPA-G had claimed Rs10.62 billion as a previous adjustment on account of reduced RLNG prices, but NEPRA found that no plant-wise or month-wise details had been provided. The regulator replaced that claim with a much larger negative adjustment of Rs17.28 billion, of which Rs15.74 billion related to RLNG plants.
In other words, a significant portion of what initially looked like August fuel-cost pressure was actually a correction of earlier accounting and tariff adjustments.
Nepra also flagged another important issue around local coal. The reported Rs5.50 per unit fuel cost for local coal was not necessarily the final economic cost. CPPA-G told the regulator that current-month invoices had been claimed at the reference tariff, with any true-up to be incorporated into subsequent FCAs. That means the unusually low August figure should not be read as a clean new benchmark for local coal generation.
There is another warning buried in the decision. Nuclear availability remained weak. KANUPP-3 had only returned to operation on September 5, while CHASNUPP-2 was operating at degraded capacity. Refueling of CHASNUPP-I was also expected to affect availability into October.
The system still needs to navigate a difficult combination of rising industrial demand, a deeper solar-induced duck curve, constrained RLNG availability and weaker nuclear output. And as the evening ramp gets steeper, the cost of the marginal unit becomes increasingly important.
The regulator itself acknowledged the concern. During the hearing, a proposal was made to move FCA toward a more prospective mechanism and to align peak hours with actual peak consumption rather than relying on the existing structure. A winter plan is also being coordinated among the power and gas sector entities to manage the coming demand and supply position.
That may be where the real story lies. Pakistan’s power problem is increasingly less about producing enough electricity over a month. It is about producing the right electricity at the right time, with the right fuel. Nepra has trimmed August’s bill. It has not trimmed that problem.
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