ISLAMABAD: The Central Power Purchasing Agency-Guarantee (CPPA-G) has projected the average power purchase price (PPP) for power distribution companies (DISCOs) at Rs27.309 per kilowatt-hour (kWh) for calendar year 2027 under its base-case scenario, with the projected cost ranging from Rs25.883 to Rs29.255 per unit under six different scenarios.
National Electric Power Regulatory Authority (NEPRA) has scheduled a public hearing for November 3, 2026, to examine CPPA-G’s projected power purchase price report, which will form part of the exercise to rebase consumer-end electricity tariffs with effect from January 1, 2027.
According to a notice issued by NEPRA, the base-case projection puts the total power purchase cost at Rs3.552 trillion for the sale of 130,081 gigawatt-hours (GWh) to distribution companies during CY2027.
READ ALSO: CPPA-G maps out five power price scenarios for 2026
The projected price under the ideal-case scenario is Rs25.883 per kWh, with the total power purchase cost estimated at Rs3.367 trillion. Under the two worst-case scenarios, the projected price rises to Rs28.835 and Rs29.255 per kWh, respectively, reflecting higher fuel costs, variable operation and maintenance expenses, and capacity charges.
The demand-sensitivity scenario envisages a power purchase price of Rs27.568 per kWh, while the scenario based on a different RLNG and gas mix projects the price at Rs26.441 per kWh.
The six scenarios have been prepared using assumptions relating to electricity demand, exchange rates, US inflation, the Karachi Interbank Offered Rate (KIBOR), the Secured Overnight Financing Rate (SOFR), local inflation, transmission charges, market operator fees and losses in the National Grid Company (NGC) system.
Under the base case, CPPA-G has assumed electricity demand growth of 2.60 per cent, an exchange rate of Rs279 per US dollar, US inflation of 2.10 per cent, KIBOR of 11.70 per cent, SOFR of 3.98 per cent and local inflation of 8.20 per cent.
The exchange rate assumption rises to Rs290 per dollar under both worst-case scenarios. The demand-sensitivity scenario assumes demand growth of 0.70 per cent, compared with 2.60 per cent under the other scenarios.
The projected power purchase price comprises fuel costs, variable operation and maintenance expenses, capacity charges, and transmission and market-related charges.
Under the base case, fuel costs have been estimated at Rs1.319 trillion, equivalent to Rs10.141 per kWh, while variable operation and maintenance expenses are projected at Rs70.575 billion, or Rs0.543 per kWh.
Capacity charges account for the largest component of the projected cost at Rs1.914 trillion, equivalent to Rs14.717 per kWh. Transmission and market-related charges have been estimated at Rs248.3 billion, or Rs1.909 per kWh.
The ideal-case scenario assumes fuel costs of Rs1.134 trillion, or Rs8.714 per kWh, while capacity charges remain at Rs1.914 trillion, or Rs14.717 per kWh. The resulting projected power purchase price is Rs25.883 per kWh.
Under worst-case scenario I, fuel costs rise to Rs1.469 trillion, while capacity charges increase to Rs1.962 trillion. The projected power purchase price consequently reaches Rs28.835 per kWh.
Worst-case scenario II envisages fuel costs of Rs1.524 trillion and capacity charges of Rs1.962 trillion, taking the projected price to Rs29.255 per kWh.
The RLNG and gas-mix scenario projects fuel costs at Rs1.206 trillion, or Rs9.272 per kWh, resulting in a power purchase price of Rs26.441 per kWh.
The demand-sensitivity scenario assumes electricity sales of 127,937 GWh, lower than the 130,081 GWh projected under the base case. Fuel costs have been estimated at Rs1.296 trillion, while capacity charges stand at Rs1.914 trillion, producing a projected price of Rs27.568 per kWh.
Copyright Business Recorder, 2026
Comments