Power tariff may rise in summer months

ISLAMABAD: While the government is going to provide relief in electricity tariff by Rs7.41 per unit in May, the end power consumers are most likely to experience a hike in the rates, mainly in the head of Fuel Cost Adjustment (FCA).

The likely hike in electricity rates is mainly because of less hydro generation in summer months due to lower water level in Tarbela and Mangla dams and dysfunctional Neelum-Jehlum project causing more reliance on costly thermal power generation.

This has been communicated by General Manager of National Power Control Centre (NPCC) during a public hearing here Tuesday on the FCA on the request submitted by Discos for March 2025. The NPCC warned of expected hike in electricity rates during summer months due to reduced hydropower generation and increased reliance on expensive fuels.

The Central Power Purchasing Agency Guarantee Limited (CPPA-G) requested a negative adjustment of 3 paisa per unit in FCA. When combined with the previously approved 90 paisa per unit for April, May and June 2025, the net negative impact will be 50 paisa per unit.

The NPCC General Manager clarified while there will be no shortage in power generation, FCA will increase due to use of costlier fuels. The CPPA-G Chief Executive Officer, Rihan Akhtar, supported NPCC’s assessment regarding expected rise in FCA.

Arif Bilwani, an intervener from Karachi, raised several questions about government’s future power generation plans, FCA structure and arrangements made by the relevant agencies.

Amir Sheikh, another intervener, pointed out while captive power plants have been compelled to switch to national grid, freeing up indigenous gas and RLNG, particularly from Sindh and KPK, this gas has not been allocated to IPPs or other sectors. As a result, he argued, the industry has not received any benefits in the form of increased FPA refunds. He questioned where the diverted gas is being used, emphasizing the industry should benefit from it through a higher FPA refund.