Power sector's circular debt hits Rs1.6trn mark: CPPA-G
This disclosure came just a day after the Power Division informed the Prime Minister during a Cabinet Committee on Energy (CCoE) meeting that circular debt had been recorded at Rs780 billion as of the same date. The higher figure was shared by CPPA-G CEO Rihan Akhtar in response to a query by NEPRA Chairman Waseem Mukhtar.
When asked if the financial impact of low recoveries and distribution losses was included in the figure, the CPPA-G CEO clarified that it was not.
Rs1.275trn loan to tackle circular debt: CPPA-G likely to sign term sheets with 18 banks
The NEPRA Chairman then directed CPPA-G to provide the complete information to the regulator in time for a public hearing on Quarterly Tariff Adjustment (QTA) scheduled for next week. The public hearing was chaired in person by Members Amina Ahmed (Law) and Maqsood Anwar Khan, while the Chairman Mukhtar and Member (Technical) joined via Zoom.
During the hearing, the CPPA-G CEO presented electricity generation data for June 2025 and requested a negative Fuel Charges Adjustment (FCA) of 65 paisa/kWh, compared to the current 50 paisa/kWh. This would result in a net tariff reduction of 15 paisa/kWh across the country.
However, the adjustment will not apply to K-Electric (KE) consumers, as the Cabinet Division has not issued directives to NEPRA in this regard. KE has sought Rs4.75/kWh as FCA for May 2025, but the Authority has yet to decide.
When asked by a journalist whether the June FCA for distribution companies (Discos) would apply to KE consumers, Member (Law) Amina Ahmed responded that NEPRA had not received any such instructions from the federal government. Currently, KE continues to file FCA requests based on its provisional tariff.
She added that since KE's final seven-year tariff has now been notified, NEPRA has directed KE to file revised FCA requests using the final approved rates.
A representative of the National Power Control Centre (NPCC), now known as ISMO, reported that total electricity generation in fiscal year 2024–25 remained below reference generation levels due to reduced demand. The peak generation during the year was 24,499 MW on June 26, 2025.
The hearing also saw sharp criticism from industry representatives from Lahore and Karachi over high electricity tariffs.
Aamir Sheikh, a consumer from the textile sector, pointed out that while the Prime Minister had announced Rs7.5/kWh relief, NEPRA had reduced it to only Rs2.5/kWh. He also raised concerns about the rising cost of bagasse-based power, which now nearly matches coal costs, suggesting a potential scandal. He recommended removing the fertilizer subsidy from RLNG prices to help lower electricity rates.
Industry stakeholders reiterated their demand that, as announced by the Power Minister, electricity duty should not be applied to bills from July onward. They also requested that furnace oil be excluded from power generation due to the Rs82,000/ton levy imposed. Further, they demanded that the Rs1.71/unit reduction, based on an additional Petroleum Levy (PL) of Rs10/litre, be continued as its collection is still ongoing.
'It was supposed to continue for the entire year,' Sheikh emphasized, adding that gas levies were also intended for reducing electricity rates, but no such adjustments have been made yet.
Rehan Jawed from Karachi highlighted the declining grid electricity demand due to the rapid spread of solar energy, particularly in high-loss areas. He argued that solar is reducing distribution losses and improving revenue collection.
'The real winners are solar panels,' he said. 'They're displacing expensive fossil fuel-based generation and improving overall system efficiency.'
ArifBilwani, another participant from Karachi, voiced serious concerns over the increasing rates of bagasse-fired power plants, urging NEPRA to review the pricing.
A representative from the Cold Storage Warehousing sector criticized NEPRA for failing to decide on their review petition pending since May 22, 2025.
Copyright Business Recorder, 2025
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