Consumers to get Rs1.03 per unit relief amid rising power costs

Electricity consumers are expected to receive a fuel cost adjustment (FCA) relief of Rs1.03 per unit for December 2024, potentially reducing their bills in February 2025. 

However, concerns persist over the prolonged shutdown of the 969-megawatt Neelum-Jhelum hydropower plant, which has deprived consumers of cheaper electricity, keeping power costs higher than they could have been.

The National Electric Power Regulatory Authority (NEPRA) held a public hearing to review a petition from the Central Power Purchasing Agency-Guarantee (CPPA-G), which sought approval for the FCA reduction. 

If approved, the tariff adjustment will apply to all eligible consumers except lifeline users, K-Electric customers, and electric vehicle charging stations.

CPPA-G officials highlighted that the seasonal winter package had helped lower electricity prices, but they also pointed out the negative impact of the non-operational Neelum-Jhelum hydropower project. They stated that had the project been running, power prices could have dropped even further. 

Another key concern raised during the hearing was the non-operation of the 747MW Guddu power plant, which also contributed to increased electricity costs. CPPA-G did not provide a clear explanation for the plant’s inactivity.

Electricity consumers voiced frustration over the persistent inefficiencies in the power system, noting that transmission failures occur frequently during both hot and rainy weather. They urged authorities to take stronger measures to bring down costs and improve reliability.

According to CPPA-G data, in December 2024, nuclear power was the largest contributor to the energy mix, generating 2,065 gigawatt hours (GWh), or 26.48% of total electricity production. Hydroelectric power followed at 22.8%, while re-gasified liquefied natural gas (RLNG)-based plants contributed 20.7%. With fossil fuel sources like natural gas and coal remaining expensive, nuclear power has become a critical component of Pakistan’s energy strategy due to its lower cost and environmental benefits.

NEPRA has already announced a reduction in electricity tariffs for ex-WAPDA distribution companies (DISCOs) and K-Electric consumers. The regulator cut FCA charges by up to 75 paisa per unit for DISCOs due to fuel cost variations in November 2024, while K-Electric consumers received a Rs0.4919 per kilowatt-hour (kWh) adjustment for October 2024. These reductions were reflected in January 2025 bills.

NEPRA also reviewed transmission and transformation (T&T) losses incurred by the National Transmission and Despatch Company (NTDC). The company reported 244.158 GWh in provisional losses, equivalent to 2.946% of total energy delivered in November 2024, exceeding its 2.639% allowance at the 500kV and 220kV levels. Meanwhile, Pak Matiari-Lahore Transmission Company (PMLTC) reported T&T losses of 19.528 GWh (3.391%), staying within the 4.3% permitted limit for its high-voltage, direct-current line.