Govt to cut agri power tariff
The government has decided to pass on the reduction in electricity prices on account of fuel cost adjustment (FCA) to the agriculture sector and domestic consumers using up to 300 units per month.
The Ministry of Energy (Power Division) has sent a letter to the National Electric Power Regulatory Authority (Nepra), asking it to implement the decision.
In the communication, Power Division Minister Awais Ahmed Leghari called for passing on the relief to agricultural consumers and domestic users who were consuming up to 300 units per month.
He recalled that the Economic Coordination Committee (ECC) had issued policy guidelines on May 21, 2015 that any reduction on account of monthly FCA would not be passed on to the domestic consumers who were already paying subsidised electricity tariff.
The regulator, in its FCA decision on June 24, 2015, also decided on the non-applicability of negative FCA to non-time of use (TOU) domestic consumers of up to 300 units. Furthermore, its decision about non-applicability of negative FCA to agricultural consumers has been in effect since November 2010. The Ministry of Energy, through its letter dated June 9, 2021, issued policy guidelines for re-targeting power subsidies in future. In line with the guidelines, Nepra in its September 2021 decision created new protected and unprotected non-TOU domestic consumer categories.
Since then, tariffs for the unprotected category have been increased gradually in line with the government policy. The power minister said that following tariff rationalisation, the policy of not passing on negative FCA to unprotected domestic consumers and agricultural consumers may not align with the principle behind past decisions. "It is requested that the authority may reconsider the non-applicability of negative FCA to unprotected domestic and agricultural categories," he said.
Relief for KE consumers
Separately, the consumers of K-Electric (KE) are set to enjoy a tariff relief of Rs4.95 per unit on account of FCA for December 2024. Nepra conducted a hearing on Wednesday to take decision on the request.
The relief will be passed on to consumers in March 2025 bills. Its aggregate amount is calculated at Rs4.94 billion.
Since September 2024, this is the fourth consecutive negative FCA being passed on to KE customers. The relief requested for November 2024 was Rs4.98 per kilowatt-hour (kWh), preceded by Rs0.27 per kWh for October and Rs0.16 per kWh for September. At the hearing, various stakeholders including consumer representatives discussed KE's historical FCA and their impact, electricity procurement and generation costs.
KE officials said the negative FCA for December 2024 was driven by zero furnace oil consumption, a lower share of re-gasified liquefied natural gas (RLNG) and increased supply from Central Power Purchasing Agency-Guarantee (CPPA-G).
Furnace oil use was zero against the reference proportion of 13%, RLNG consumption was 19% against the reference proportion of 21% while power offtake from CPPA-G increased from 52% to 74%. KE submitted the hourly data of economic merit order along with responses to the queries made by Nepra.
Jehanzaib, a Karachi-based consumer, inquired about FCA comparisons between KE and ex-Wapda distribution companies (DISCOs) over the past few years. In response, Nepra Member Technical from Sindh Rafique Ahmed Shaikh mentioned that KE had provided greater FCA relief to consumers in the last two years compared to other DISCOs and emphasised that FCA decisions were made transparently and applied across all DISCOs.
Another customer asked for the negative FCA to be accounted for in the summer, especially to offset high electricity bills due to increased demand during those months.
Discussions were also held on the status of KE's Bin Qasim Power Station-I (BQPS-I) units 1 and 2, with Arif Bilwani seeking clarification on whether the units were operational. KE officials responded that while an extension request was submitted to the regulatory authority for making the units operational, no decision had been notified so far and no cost had been claimed for those units.
Umer, who represented a think tank, emphasised the importance of negative FCA for reducing electricity costs for consumers. He commended Nepra's approach of gradually adjusting the fuel cost relief, citing the November FCA, rather than passing on the entire amount in one go. "This strategy will help balance future costs and shield consumers from sudden price spikes," he said.
Umer was of the view that such a measured approach would contribute to greater stability and sustainability in electricity prices.
Building on the same perspective, an energy correspondent appreciated Nepra for its futuristic approach.
He inquired about the outstanding balance, which was yet to be adjusted, responding to which Nepra officials said Rs5 billion out of Rs13 billion had already been incorporated.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Business Recorder
4 days ago
- Business Recorder
Has Rs1.71/unit electricity relief vanished?
It was widely expected that the government would continue the Rs1.71 per unit electricity subsidy component—backed by the IMF staff-level agreement, which explicitly cited plans to fund the relief via additional Petroleum Levy collections. Yet, to the surprise of many, the subsidy appears to have quietly disappeared—if not formally withdrawn, then at least absent from the electricity bills issued for July 2025. Recall that the only component explicitly extended into FY26 was the Rs182 billion relief—equivalent to Rs1.71 per unit—for all non-lifeline consumers, financed through the enhanced Petroleum Levy. The government, in its communication with the IMF, had committed to maintaining this limited relief until June 30, 2026. Significant ambiguity now surrounds the fate of this relief and its continuity into FY26. The matter came up during Nepra's recent tariff hearing, but the Ministry of Energy's remarks did little to resolve the uncertainty. In its response, the Ministry noted that the 'average applicable consumer tariff in July 2025 would be lower by around seven rupees compared to July 2024.' While ostensibly reassuring, the phrasing raises more questions than it answers. No assumptions were disclosed, nor was it clarified whether the comparison referred to gross billing or adjustments embedded within the base tariff trajectory. With the Rs1.71 per unit subsidy now seemingly off the table, the month-on-month increase in tariffs for non-lifeline protected consumers—who account for the bulk of domestic electricity consumption—exceeds 30 percent. Previously, under the assumption of subsidy continuity, first and second protected slabs were projected to rise by 11 and 9 percent, respectively. They now stand to increase by 35 and 26 percent, respectively. Among non-protected slabs, effective tariffs for the first three categories are slated to rise by 12, 9, and 8 percent month-on-month. This development implies that effective tariffs in July may be materially higher than assumed—at odds with both prior policy signalling and the inflation projections built on that premise. Whether this reflects a temporary lapse awaiting formal notification, an oversight in tariff design, or a quiet policy reversal is yet to be clarified. What is clear, however, is that this shift—if sustained—has real implications that one hopes the Pakistan Bureau of Statistics (PBS) appropriately incorporates any change in effective tariffs into its CPI computation, lest the official inflation trajectory miss a key price signal affecting millions.
Business Recorder
4 days ago
- Business Recorder
Discos' June FCA: FPCCI flags objections and regulatory queries
ISLAMABAD: The Federation of Pakistan Chambers of Commerce and Industry (FPCCI) has raised formal objections and regulatory queries on FCA of Discos for June 2025. In a letter to Registrar, Nepra, FPPCI said that while the proposed negative adjustment of Rs. 0.6541/kWh may appear consumer-friendly but it grossly under-represents the hidden inefficiencies, persistent opacity, and regulatory shortcomings plaguing the power sector. According to the FPCCI, the actual negative FCA, if inefficiencies were removed, would justifiably fall between Rs2.50/kWh to Rs3.00/kWh. Nepra's own Member (Technical) has consistently flagged major concerns across multiple FCA hearings. Drawing from these issues and recent disclosures-including the Rs. 244 billion overbilling scandal, system losses exceeding Rs. 267 billion, and long-standing unresolved outages- FPCCI has requested that NEPRA, while rejecting the current FCA proposal, seek direct and time-bound explanations from CPPA-G and the Power Division on the following points: (i) when will CPPA-G, ISMO, and NTDC be mandated to submit detailed, verifiable deviation and constraint logs before each FCA hearing, as required under principles of transparency? (ii) Why are completion timelines for key infrastructure-such as the Lahore North Grid, SCADAIII, and restoration of HVDC transmission-still unpublished despite repeated cost impacts due to underutilization and system constraints? (iii) What efforts have been made to resolve the Guddu ST-16 (747 MW) outage persisting since July 2022, and the Neelum-Jhelum Hydropower Plant (969 MW) shutdown since May 2024? What is the current status and who is accountable for the resulting losses exceeding Rs 150 billion? (iv) Why generic ISMO certificates are still being accepted as evidence during FCA hearings, especially when ISMO is not fully operational? Will Nepra now require these to be supported by publicly auditable dispatch data? (v) How does Nepra reconcile system losses at 17.55%-far above the allowed 11.43%-with recovery claims of 96.6%, especially when SEPCO and QESCO report recovery levels of only 25.8% and 38.7% respectively? Has Nepra verified the raw meter data? (vi) What enforcement action has Nepra taken against DISCOs involved in the 2024 and 2025 overbilling scandals? Why is there no public disclosure of disciplinary outcomes? (vii) Why were costly fuels like RLNG (Rs. 21.87/kWh) dispatched in June 2025 despite zero dispatch from HSD and large availability of hydel? Has Nepra reviewed the validity of PLAC claims made under such suboptimal dispatch? Why are Nepra's statutory obligations under Article 19A of the Constitution and Section 7(2)(f) of the NEPRA Act—to ensure public access to data-not being enforced rigorously? (ix) Why have the Service Level Agreements (SLAs) of K-Electric's plants been made publicly available for comments, while the Power Purchase Agreements (PPAs) signed by CPPA-G which underpin uniform national tariffs-have never been published for public scrutiny. The FPCCI also asked why the Service Level Agreements (SLAs) of K-Electric's plants are made publicly available for comments, while the actual Power Purchase Agreements (PPAs) signed by CPPA on which the entire nation's consumers are charged under the uniform tariff-are never subjected to public scrutiny? 'Is transparency only reserved for Karachi, or do the rest of the country's power contracts not deserve the same accountability?' FPCCI questioned. The association argues that power sector cannot be allowed to continue this selective opacity, systemic overbilling, and absence of accountability while the public pays for inefficiencies it did not cause. 'We urge Nepra to use this FCA proceeding to assert its independence, enforce disclosure, and direct corrective action through binding regulatory orders,' said the FPCCI. The Nepra will hold a public hearing on July 30, 2025 to be attended by the public and private sector. Copyright Business Recorder, 2025
Express Tribune
4 days ago
- Express Tribune
KE agrees to pay Sindh Rs9b electricity duty
Additional concerns were raised over capacity payments to K-Electric's power plants, projected to cost over Rs 82b. PHOTO: FILE The K-Electric (KE) after several years of delay has started payments of electricity duty amounting to Rs32 billion, it has collected from consumers through monthly bills, to the Sindh government. As per the agreement, the power utility has agreed to pay Rs1.25 billion to the provincial government in two installments. This move is part of a broader agreement under which KE has committed to pay Rs9.142 billion out of a total outstanding amount exceeding Rs32 billion. A payment schedule has also been issued. According to the agreed timeline, the power utility will pay Rs4.258 billion to the Sindh government by September 2025. Additionally, the K-Electric will now be required to regularly remit the electricity duty it collects from consumers through monthly bills. The issue of non-payment of electricity duty was taken up by the Public Accounts Committee (PAC). Meanwhile, the Rs25 billion dues between KE and the Karachi Water and Sewerage Board remain unresolved. K-Electric has warned government departments of potential disconnection if bills are not paid on time. The power utility in its letter to the secretary of the Sindh Energy Department referred to the discussion between KE team and PAC members on June 31, during which payment with respect to Electricity Duty (ED) was deliberated upon. As agreed, reconciled electricity consumption dues of the Karachi Water and Sewerage Corporation (KWSC) will be held for adjustment against ED accumulated up to August 2024 and the excess amount of ED for the said period shall be paid by KE in line with the agreed installments as reflected in the schedule. Furthermore, KE will also deposit the respective ED amount for the period from September 2024 to September 2025, no later than 30th September 2025, into the respective Government Treasury. Moreover, it was also discussed that payment to KE for electricity dues by Sindh government and its various departments should also be paid on timely basis failing which, KE would be at liberty to take appropriate action including, but not limited to, disconnection of the respective electricity connections albeit in accordance with law.
