The government has issued a warning about a possible increase in electricity bills during the summer months, attributing the rise to decreased hydropower generation and greater reliance on costly fuels.

This announcement came during public hearings conducted by the National Electric Power Regulatory Authority (Nepra) regarding the Fuel Cost Adjustment (FCA) for March 2025 and the Quarterly Tariff Adjustment (QTA) for the third quarter of FY2024-25.

Officials from the National Power Control Centre (NPCC) and the Central Power Purchasing Agency – Guaranteed (CPPA-G) indicated that the QTA is projected to yield a negative adjustment of Rs 1.52 per unit, which will be applicable in May, June, and July 2025.

Distribution companies (Discos) have requested a total reduction of Rs 51.493 billion, largely due to lower capacity charges, including Rs 16 billion from contract terminations and Rs 17 billion from revised agreements with Independent Power Producers (IPPs).

This adjustment will also affect K-Electric consumers, with total savings from these agreements reaching approximately Rs 91 billion.

For March’s FCA, a negative adjustment of 3 paisa per unit has been proposed, impacting consumers by Rs 250 million.

However, when combined with the previously approved 90 paisa per unit for April through June 2025, the net relief for consumers will be limited to 50 paisa per unit, not including lifeline consumers.

The actual reference fuel cost for March was Rs 9.2251 per unit, compared to a reference FCA of Rs 9.2560 per unit.

CPPA-G CEO Rihan Akhtar noted that the inclusion of a Rs 3.291 billion Prior Year Adjustment (PYA) would have led to a higher positive impact on consumer bills.

NPCC General Manager assured that power generation would be adequate due to fuel availability, though FCA costs are expected to rise due to the use of more expensive fuels.

The CPPA-G reported a 6% decrease in electricity demand in March 2025 compared to March 2024, but a 6% increase compared to February 2025.

The NPCC also noted an 8.70% decrease in energy transmission in March compared to the same month the previous year, citing routine and forced outages that necessitated the operation of costly plants.

During the hearings, questions arose regarding fuel allocation and future power generation plans.

Amir Sheikh criticized the lack of benefits to the industrial sector despite the availability of indigenous gas, while Arif Bilwani sarcastically suggested that officials should not rely solely on luck.

Nepra Chairman Waseem Mukhtar expressed frustration over the absence of senior officials from the Power Division and three key distribution companies—HESCO, MEPCO, and PESCO.

He indicated that if the QTA had not been negative and in favor of consumers, he would have dismissed the petitions from Discos.

Sheikh urged for the QTA to be implemented starting in April to meet the Prime Minister’s commitments, warning that any delay would undermine promised rate reductions.

Tanveer Barry from the Karachi Chamber of Commerce and Industry criticized the performance of Discos in addressing theft and bill recovery, highlighting that Pakistan’s circular debt has reached Rs 2.4 trillion, representing 2.3% of GDP.

He also called for efforts to lower the base tariff in the upcoming fiscal year, stating that the current three-month relief is insufficient.

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