The National Electric Power Regulatory Authority (Nepra) has approved a negative quarterly adjustment of Rs 1.9 per unit for consumers of Distribution Companies (Discos) and K-Electric, effective from April 1 to June 30, 2025, along with a negative FCA of Rs 3.021 per unit for January 2025, which will be refunded to K-Electric consumers in their April 2025 bills.
The move, aimed at providing relief to consumers, will apply to all consumer categories. Nepra’s decision follows a public hearing regarding discrepancies in the data submitted by Discos, where concerns were raised about inconsistencies between figures from Nepra and the Power Division.
The negative quarterly adjustment, amounting to a total of Rs 56.38 billion, will be spread over three months, reflecting a uniform reduction of Rs 1.9004 per kilowatt-hour (kWh).
In addition to the quarterly adjustment, Nepra also approved a negative adjustment of Rs 0.4641 per kWh for February 2025, which will result in a refund of approximately Rs 3 billion to consumers. This adjustment will be reflected in April 2025 bills.
Nepra also acknowledged several challenges faced by the power sector. It raised concerns about the persistent decline in electricity sales, urging the Power Division to investigate the root causes of the downward trend.
Additionally, the power regulator highlighted the ongoing issue of power plants operating outside the economic merit order, which is inflating the electricity purchase price (EPP). The Authority called for immediate steps to address these merit order violations, which are driving up fuel cost adjustments (FCAs).
Given the forecasted low hydrology in the coming months, Nepra has instructed the Power Division to implement a mitigation plan focused on maximizing the use of cost-effective power sources, such as nuclear, Thar coal, and imported coal plants. The goal is to reduce the financial burden on consumers while maintaining reliable electricity supply.
Further, Nepra has expressed concern over the National Transmission and Dispatch Company’s (NTDC) repeated failure to meet deadlines for critical transmission projects.
In terms of financial adjustments, Nepra has decided to pass on the impact of retained negative FCAs amounting to Rs 23 billion to all consumers (except lifeline and protected domestic categories) for the period from July 2024 to February 2025. The amount will be refunded over three months, from April to June 2025, at a rate of Rs 0.90 per kWh.
Regarding K-Electric, Nepra has approved a negative FCA of Rs 3.021 per unit for January 2025, amounting to Rs 2.93 billion, which will be refunded to KE consumers in their April 2025 bills. This adjustment will apply to all K-Electric consumers except lifeline, protected domestic, Electric Vehicle Charging Stations (EVCS), and prepaid consumers.
However, the FCA for K-Electric remains provisional and will be subject to future adjustments based on the Multi-Year Tariff (MYT) for FY 2024-30.