Power distributors seek Rs51.5bn refund for consumers on lower capacity costs

Net proposed refund stands at Rs51.49bn, down from initial Rs53.26bn due to Iesco's claim

By Our Correspondent
April 16, 2025
A general view of the high voltage lines. — AFP/File
A general view of the high voltage lines. — AFP/File

ISLAMABAD: Pakistan’s state-run power distribution companies have requested regulatory approval to refund Rs51.49 billion ($185 million) to consumers, citing lower capacity payments during the third quarter (Jan-March) of fiscal 2024-25.

The savings were primarily driven by a Rs47.12 billion reduction in capacity charges after the government terminated multiple contracts with Independent Power Producers (IPPs), according to filings with the National Electric Power Regulatory Authority (NEPRA). Additional savings of Rs4 billion came from improved transmission and distribution (T&D) efficiency and recovery of fixed costs on incremental units.

Nine ex-WAPDA distribution companies, including MEPCO, LESCO, GEPCO, and FESCO, submitted petitions seeking the refund for the January-March 2025 quarter. IESCO was the only utility that reported an increase in costs and has proposed a Rs1.76 billion charge to consumers due to higher capacity and system operation expenses. The net proposed refund stands at Rs51.49 billion, down from an initial Rs53.26 billion due to IESCO’s claim.

Multan Electric Power Co. (MEPCO) reported the largest capacity savings at Rs14.44 billion, followed by Lahore’s LESCO (Rs7.82 billion), Gujranwala’s GEPCO (Rs6.48 billion), and Faisalabad’s FESCO (Rs4.25 billion). Smaller savings were posted by TESCO (4.03bn), HESCO (Rs3.8bn), SEPCO (Rs3.32bn), PESCO (Rs2.54bn), and QESCO (Rs2.29bn).

Transmission and distribution losses fell by Rs2.05 billion, while the recovery of incremental units contributed another Rs4.96 billion. However, charges related to system usage and market operations rose by Rs1.81 billion, and operation and maintenance expenses increased by Rs829 million during the quarter. NEPRA is scheduled to conduct a public hearing on the petitions on April 29.

The refund, if approved, would mark another reduction in power tariffs, which have trended downward through the fiscal year amid declining fuel and capacity costs. Discos have already issued significant refunds via monthly fuel charge adjustments in recent months.