Pakistan’s National Electric Power Regulatory Authority (NEPRA) is considering an increase in electricity prices, with a proposed hike of Rs4.66 per unit in the power tariffs for January 2024 bills.
The increase, which could result in an additional financial burden of Rs33 billion for consumers, is linked to the fuel adjustment for November 2023.
During a public hearing on the Central Power Purchasing Agency’s (CPPA) plea, NEPRA raised concerns about the operational choices in power generation. The regulatory authority questioned the CPPA, representing Distribution Companies (Discos), regarding the use of expensive imported fuel for power plants and the closure of more cost-effective plants for maintenance. Specifically, the maintenance shutdown of the Thar coal-based plant was noted as a factor contributing to the rise in electricity costs. Additionally, a 13% decrease in electricity consumption and reliance on costly imported LNG fuel in November 2023 exacerbated the financial strain on consumers.
Addressing allegations of overbilling, NEPRA emphasized its commitment to implementing past decisions and enforcing its recent ruling. The regulator has issued explanations to Discos and plans to initiate legal actions against any non-compliance. The CPPA, in response to queries about recent load shedding, cited several factors, including losses managed by Discos, decreased hydel generation, unavailable gas supply, and a 2-hour load management policy as per government directives.
The Power Division also acknowledged the load shedding on December 25th and 26th, attributing it to grid station failures in the Multan region and other Discos and system constraints from reduced hydel generation and fog.
The generation shortfall, partly due to canal closure and limited LNG availability, has prompted furnace oil to generate additional power and efforts to stabilize the system. Despite these measures, load-shedding remains necessary to manage the system constraints and ongoing efforts are in place to ensure stability.
