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Govt seeks further increase in power tariff from NEPRA to meet IMF demand

ISLAMABAD: The federal government has filed a petition with the National Electric Power Regulatory Authority (NEPRA) seeking an increase in the electricity tariff by Rs6.51 to determine the base tariff for the financial year 2024-25.

The government aims to raise the power purchase price to Rs27.11 per unit from the current Rs20.60 per unit.

This development follows the regulatory body’s recent approval of a Rs2.83 per unit hike in power tariff for March 2024, based on monthly fuel adjustments.

NEPRA’s notification stated that the adjustment of Rs2.83 per kWh would apply to all consumer categories except Electric Vehicle Charging Stations (EVCS), lifeline consumers, and K-electric consumers.

Energy ministry officials noted that the base tariff for the financial year 2024-25 could rise to Rs36.28 per unit from the current base tariff of Rs29.78, which was Rs24.82 per unit in 2022-23, once distribution margins and prior year adjustments are included.

They also indicated that the end consumer tariff during peak hours for domestic consumers could increase to Rs48.51 per unit from over Rs42 per unit if the allowable losses of 11% from Distribution Companies (Discos), surcharges, taxes, and duties are factored into the bills.

The CPPA petition projects that Discos will purchase 130.876 billion electricity units at a cost of Rs3.589 trillion during the next fiscal year, with a power purchase price (PPP) of Rs27.11 per unit and Rs3.3 trillion at a PPP of Rs25.03 per unit.

Capacity payments for the financial year 2024-25 are projected to rise to Rs2.278 trillion, primarily due to the addition of 1,002 megawatts from three new projects in 2024.

The 870 MW Sukhi Kinari Hydro Project is expected to come online on November 30, 2024, the 100 MW Zorlu Solar Power project on October 11, 2024, and the 32 MW Shahtaj Sugar Mill Limited on August 11, 2024. These capacity payments will contribute Rs17.42 per unit to the electricity cost.

Currently, capacity payments stand at Rs1.9 trillion, which translates to Rs14.09 per unit in the electricity tariff paid by end consumers.

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I am an experienced writer, analyst, and author. My exposure in English journalism spans more than 28 years. In the past, I have been working with daily The Muslim (Lahore Bureau), daily Business Recorder (Lahore/Islamabad Bureaus), Daily Times, Islamabad, daily The Nation (Lahore and Karachi). With daily The Nation, I have served as Resident Editor, Karachi. Since 2009, I have been working as a Freelance Writer/Editor for American organizations.

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