Power consumers to face Rs8.41bn hit under quarterly tariff review

ISLAMABAD: The National Electric Power Regulatory Authority (NEPRA) on Thursday considered a positive quarterly adjustment of up to 50 paisa per unit for the first quarter (July–September 2025) of the current fiscal year to allow power distribution companies (DISCOs) and K-Electric to recover an additional Rs 8.41 billion from consumers under the Quarterly Tariff Adjustment (QTA) mechanism.

The hearing, held on November 6, 2025, was based on petitions filed by the Central Power Purchasing Agency Guaranteed (CPPA-G) on behalf of distribution companies. According to NEPRA officials, the QTA is determined under Section 31(7)(ii) of the NEPRA Act, which provides for periodic tariff adjustments to account for variations in capacity, transmission, and operational and maintenance costs, as well as the impact of transmission and distribution (T&D) losses on fuel charges adjustments (FCA).

DISCOs, except for HESCO, PESCO, and TESCO, sought recovery of Rs 21.702 billion from consumers for the first quarter of FY 2025-26. However, the overall claim was offset by negative adjustments of Rs 13.292 billion on account of variable operation and maintenance (O&M) charges, use of system charges (UoSC), market operator fee (MoF), and the impact of T&D losses on monthly FCAs.

According to data presented to NEPRA, Islamabad Electric Supply Company (IESCO) sought a positive adjustment of Rs 1.151 billion, Lahore Electric Supply Company (LESCO) Rs 8.453 billion, Gujranwala Electric Power Company (GEPCO) Rs 4.226 billion, Faisalabad Electric Supply Company (FESCO) Rs 2.337 billion, and Multan Electric Power Company (MEPCO) Rs 4.347 billion. Meanwhile, Peshawar Electric Supply Company (PESCO) reported a negative adjustment of Rs 120 million, Hyderabad Electric Supply Company (HESCO) Rs 3.212 billion, Quetta Electric Supply Company (QESCO) Rs 1.772 billion, Sukkur Electric Power Company (SEPCO) Rs 1.528 billion, Tribal Electric Supply Company (TESCO) Rs 254 million, and Hazara Electric Company (HAZECO) Rs 1.474 billion.

The total negative adjustment under variable O&M was Rs 3.978 billion, under UoSC and MoF Rs 6.435 billion, and Rs 2.879 billion due to the impact of T&D losses on monthly FCAs. NEPRA officials noted that these adjustments represent the reconciliation of actual costs incurred by power utilities compared with the reference costs built into their base tariffs.

In accordance with policy guidelines issued by the federal government, NEPRA confirmed that the uniform quarterly adjustments applicable to DISCOs would also extend to K-Electric consumers, ensuring parity across the country. The quarterly tariff determinations for DISCOs are therefore equally applicable to K-Electric customers with the same effective period, starting from April–June 2023.

Sources in the Power Division said the impact of this positive quarterly adjustment will be passed on to consumers nationwide through upcoming bills during December 2025 and January–February 2026. The existing negative QTA adjustment of Rs 1.80 per unit, which previously provided relief to consumers, will no longer remain in effect once the new determination takes effect.

NEPRA will issue its final determination on the QTA after reviewing the data and stakeholders’ input from the hearing. The adjustment is part of the regulatory mechanism aimed at ensuring cost recovery and maintaining financial sustainability in the power sector while balancing the impact on consumers.