NEPRA will examine power tariff reductions and the government will reimburse excess electricity charges.
IRMABAD: 15 March 2025, Based on decreased fuel prices in February 2025 the federal government has agreed to reimburse excess charges collected in electricity bills a move that might provide much needed relief to electricity consumers nationwide. Fuel cost modifications are the driving force behind the plan which might lower electricity rates for both general and K-Electric (KE) customers.
CPPA Requests February Fuel Price Adjustment
The National Electric Power Regulatory Authority (NEPRA) has received a formal request for a monthly Fuel Cost Adjustment (FCA) from the Central Power Purchasing Agency (CPPA) which is in charge of purchasing electricity on behalf of distribution companies.
Based on the information provided by the CPPA:
- February electricity production was 6.49 billion units.
- 6.66 billion units of electricity were delivered to power companies.
- Rs. 8.22 is the actual cost of generation per unit.
- Reference price (February benchmark): Rs. 8.52 per unit
This difference between reference and real costs suggests that customers overpaid, which gives rise to a refund. Customers may see a reduction in their future electricity costs of up to 30 paisas per unit if NEPRA grants the CPPA’s proposal at the hearing on March 26.
Feb 2025 Power Generation Mix
Pakistan’s energy mix for February is also highlighted by the statistics which shows a varied yet fuel-cost-sensitive power generation structure:
- 27.12% hydropower
- 15.02% local coal
- Coal imports: 1.56%
- 10.32% for gas
- LNG imports: 14.11%
- Nuclear power: 26.59%
The potential rebate is the result of the average cost of electricity generation declining due to the rising share of low cost sources like nuclear and hydropower.
K-Electric also suggests a significant tariff reduction
In a related move, Karachi’s only electricity supplier K-Electric (KE) has also submitted a separate FCA petition to NEPRA requesting a substantial power tariff cut of Rs. 4.84 per unit for January 2025.
According to the utility provider the cost of fuel in January was significantly less than the reference rate that customers were charged. KE has therefore suggested that its consumers receive a refund of roughly Rs. 4.84 billion through the FCA process.
To examine KE’s petition and determine if the suggested reimbursement is in line with the true expenses incurred NEPRA has set a public hearing for March 20.
Consumer Assistance Is Coming
In the event that the KE and CPPA applications are both granted:
- National customers could get a refund of 30 paisas per unit.
- KE customers in Karachi can receive a refund of Rs. 4.84 per unit.
In the face of wider inflationary pressures, these changes may result in a significant drop in electricity costs.
What Takes Place Next?
- NEPRA will hold a public hearing on KE’s request for a fuel adjustment on March 20.
- March 26: CPPA’s request for a nationwide FCA refund will be reviewed by NEPRA.
The lower prices will be reflected in the following billing cycle for customers, directly modifying the amount owed, subject to approvals.
