Nepra eyes tariff revamp as power demand pattern shifts

ISLAMABAD: The National Electric Power Regulatory Authority (Nepra) has instructed policymakers to conduct a comprehensive study to adjust the time of use (ToU) tariff in response to changing demand patterns for electricity.

This directive was issued during a public hearing on the petition of state-owned power distribution companies (DISCOs) who sought Nepra’s approval for refunding Rs0.63 per unit under Fuel Adjustment Charge (FAC) for November 2024 to consumers.

Nepra Chairman Waseem Mukhtar, while chairing the proceedings, noted Central Power Purchasing Agency-Guarantee (CPPAG) on behalf of Discos had requested Rs47 billion in 2023, Rs56 billion in 2024 and now Rs2.2 billion for November 2024 alone, citing partial load issues stemming from the evolving demand for electricity. In the light of these figures, Nepra emphasized the need for a detailed analysis of demand patterns to facilitate appropriate adjustments to the time of use tariff.

Nepra expressed serious concerns on ongoing delays in the completion of 500kV Lahore (North) grid station and ordered an inquiry into the matter. Months earlier, the NTDC had committed before the regulator it will complete the project in August 2024, but now revised the timeline to April 2025, the NTDC official informed the regulator.

In response to an inquiry by Nepra chairman, an NTDC representative cited unspecified reasons for the delay, leaving stakeholders concerned about impact on the grid’s capacity to alleviate congestion and improve reliability in Lahore and surrounding regions. When this project is completed, it will help evacuate power from Matiari-Lahore High Voltage Direct Current (HVDC) transmission line for supply to various cities of Gujranwala Division through 500kV Nokhar grid station and transmission lines near Gakhar, Gujranwala.

The regulator asked about utilisation of HVDC line, the official said during November 2024, the maximum loading was 2,600 MW, while the average was 8,00 MWs against its full capacity of 4,000 MWs. It indicates HVDC utilisation was only 20 percent. The chairman also asked that with the coming Lahore North grid online, what increase we can see, the official said that it will increase by over 300 MWs.

Additionally, Nepra raised alarms over slow progress in expanding local coal mines, urging government to address issues related to Pakistan Railways to ensure provision of most affordable electricity to consumers. Stakeholders highlighted a dispute between Lucky Cement and Pakistan Railways over a coal yard, which needs resolution.

Currently, the Lucky Plant is operating on imported coal, raising concerns among stakeholders about implications for electricity costs. Participants in the public hearing also questioned higher electricity costs associated with indigenous coal, prompting further discussions on sustainability and pricing of local energy sources.

The regulator expressed concern over planning deficiencies within NTDC and the chairman criticised NTDC for not conducting an investigation into the reasons behind the changing load patterns, stating, “This is something you should have been doing”.

The official of the ministry said changes in load pattern were under consideration, and in next base tariff petition they will include it. The chairman Nepra suggested since the government is going to submit a petition before Nepra in January or February for the base tariff, so bring this [load pattern change] also to us.

Regarding the winter package, an official said till December 26, 838,000 consumers have availed it. Of this, residential consumers are 342,208, industrial are 28,431 and commercial are 467,416. They received 45 million additional units. The Power Division official also said circular debt was now at Rs2.38 trillion of which the payables to IPPs stands at Rs1.6 trillion.

Officials reported 7.22 billion electricity units were generated in November 2024. They noted generation costs for the month approached reference levels. Compared to November of last year, electricity sales increased by 6.34pc.

Furthermore, it was reported more electricity was generated from local and imported coal, with National Power Control Centre (NPCC) supplying an additional 500 megawatts to K-Electric. This supply allowed K-Electric to operate coal power plants more efficiently, especially in south.