Print Print edition: 2025-09-12

Hike in expenditures & tariff: Nepra, consumers question Wapda’s ‘request’

Published September 12, 2025 Updated September 12, 2025 09:25am

4 min

By Mushtaq Ghumman

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ISLAMABAD: The National Electric Power Regulatory Authority (Nepra) and electricity consumers on Thursday sharply questioned Water and Power Development Authority (Wapda) over its request for a substantial increase in expenditures and an over 80 percent hike in the average power tariff — from Rs 3.11/kWh to Rs 5.68/kWh — for the fiscal year 2025–26.

The public hearing was officiated by Chairman Nepra, Waseem Mukhtar, Member (Law) Amina Ahmed, Nepra Member (Development) Maqsood Anwar Khan and Member (Technical) Rafique Ahmad Shaikh.

Wapda has sought a total of Rs 364 billion for the upcoming fiscal year. If approved in full, this would result in an increase of Rs 2.57 per unit in the base tariff.

FPCCI urges Nepra to reconsider cost escalations by Wapda

The authority is seeking a jump in its average base tariff from Rs 3.11/kWh to Rs 5.68/kWh.

For return on investment (RoI), WAPDA has requested Rs 32.011 billion for power stations—up 9 percent from Rs 29.453 billion. Meanwhile, RoI on power projects has been projected at Rs 99.642 billion, a staggering 172 percent increase from Rs 36.771 billion in FY 2022–23.

Other income has been projected at Rs 772 million in FY 2025–26, compared to Rs 535 million in 2022–23. For the above-mentioned categories, Wapda has sought Rs 179.141 billion, marking an 85 percent rise from Rs 96.933 billion.

Although Nepra has not proposed any amount on account of the regulatory gap for FY 2025–26, it has included earlier claims of: (i) Rs 22.352 billion for FY 2022–23; (ii) Rs 56.038 billion for FY 2023–24, and (iii) Rs 60.975 billion for FY 2024–25.

Wapda’s total revenue requirement request shows an overall 165.5 percent increase, rising from Rs 119.962 billion in 2022–23 to Rs 318.507 billion in 2025–26.

For Net Hydel Profit (NHP) and other levies, Wapda has proposed: (i) Rs 29.526 billion for Khyber Pakhtunkhwa (down from Rs 30.027 billion); (ii) Rs 11.969 billion for Punjab (up from Rs 11.867 billion);(iii) Rs 5.086 billion in water usage charges for Azad Jammu and Kashmir (up from Rs 4.222 billion); and (iv) Rs 158 million for the Indus River System Authority (Irsa), slightly up from Rs 156 million.

Nepra had earlier notified interim NHP rates for FY 2022–23 at Rs 1.548/kWh for Khyber Pakhtunkhwa and Rs 1.474/kWh for Punjab, subject to final adjustment pending a decision by the Council of Common Interests (CCI). The same rates have been proposed for FY 2025–26 in the latest petition.

Wapda’s cumulative revenue requirement, including hydel levies, now stands at Rs 364.872 billion, up from Rs 190.909 billion in 2022–23. Its net power generation is estimated at 31,563 GWh for FY 2025–26, slightly up from 31,286 GWh in FY 2022–23.

Wapda is also seeking a 100 percent increase in salaries over three years, raising salary expenditure from Rs 7.41 billion to over Rs 15 billion. This issue also came under scrutiny during the public hearing.

In addition, the authority has demanded Rs 99 billion to pay interest on loans for ongoing development projects.

During the hearing, Wapda officials admitted that several projects have been halted due to security and other issues.

Nepra Member (Technical) Rafique Ahmad Shaikh grilled Wapda officials over the performance of completed hydropower projects.

“Name one project that has met its production target,” he asked.

Wapda representatives responded that performance should be evaluated in terms of the organization’s overall contribution rather than individual project outcomes.

This drew a sharp response from Member Shaikh: “Is Wapda suggesting that Nepra should not question the performance of individual projects?” He added that the Authority might have been more inclined to appreciate Wapda if it had proposed a tariff decrease rather than an increase.

Wapda officials countered by emphasizing that had there been adequate water reservoirs, flood damage could have been significantly reduced.

Nepra officials also dispelled the impression that hydel generation is still a cheap source of energy, saying that renewable energy is cheap but not hydel.

The levelized tariff of some of Dasu hydropower project will be Rs 22 per unit, said Arif Bilwani.

Wapda’s Regulatory Asset Base (RAB) for development projects has been calculated based on average Capital Works in Progress (CWIP), excluding IDC and grants. A debt-to-equity ratio of 80:20 is used as a benchmark for power projects, in line with the standard set in FY 2015–16.

Arif Bilwani said that equity that was initially injected in Wapda by GOP was through recovery from Consumer Tariff which was ploughed back with recurring profit over the years Why consumers should pay ROE on this equity?

Allocations from annual PSDP, if any, for Wapda hydroelectric projects are contributed by public through taxes. No return should be allowed on these injections.

Demanding returns on the increased cost of projects, due to delay in their implementation is not justifiable for eg. Project cost of stage 1 (2,160MW) of Dasu was approved in 2014 for Rs 486 billion then revised in 2019 to Rs 511 billion & was further revised to Rs 1,738 billion. Should the consumer pay for this escalation? & the enhanced tariff?

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