Nepra allows salary, bonus increases for CPPA-G employees for FY26

The National Electric Power Regulatory Authority (Nepra) has allowed salary increases, performance increments and bonuses for employees of the Central Power Purchasing Agency (Guarantee) Limited (CPPA-G) while deciding its market operation fee for FY2025-26.

According to a news report, the decision comes as the power sector continues to face concerns over inefficiencies, weak performance and governance issues.

CPPA-G had sought approval of a market operation fee of Rs14.67 per kW per month, including prior-year adjustment and miscellaneous adjustments. It had also requested a net revenue requirement of Rs 4.664 billion.

The company also sought approval to recover legal expenses through periodic tariff adjustments and permission to actualise expenditures on the basis of audited accounts.

For employee costs, Nepra allowed salary increases based on the average Consumer Price Index of 4.49%. It also approved performance increments averaging around 6%.

The total approved increase came to 10.49%, against CPPA-G’s request for 11%.

The regulator endorsed salaries costing Rs1.585 billion and allowed employee benefits of Rs249 million.

CPPA-G had requested Rs199 million, equivalent to 1.5 gross salaries, as an employee bonus. Nepra approved one basic salary as a bonus, amounting to Rs55.64 million.

The company had also proposed hiring dozens of additional employees. Nepra allowed costs only for 26 employees who had already been hired, approving Rs109.71 million for the purpose.

The regulator said any future recruitment would require separate justification.

CPPA-G had requested Rs32 million for training expenses. Nepra approved Rs8.58 million based on actual expenditure, noting that the market operator function had shifted to ISMO.

The regulator rejected expenses for hiring headhunting consultants, succession planning consultants and a compensation survey.

However, it allowed Rs1 million for testing services, Rs0.7 million for a board evaluation consultant and Rs2 million for hiring tax consultants.

On administrative costs, CPPA-G had requested Rs316 million, while Nepra allowed Rs271.11 million.

Reductions were made in telephone and communication expenses, board and audit fees, outsourced services and insurance costs.

Nepra also disallowed all ESG-related expenses, saying such CSR-type activities should not be passed on to electricity consumers.

For repair and maintenance and IT services, CPPA-G had sought Rs241 million. The regulator approved Rs137 million after reducing costs related mainly to IT services, vehicles, and repair and maintenance.

The company had also requested Rs164 million, largely for capital expenditure. Nepra allowed several operational expenses but reduced the number of requested costs.