Power purchase price set at Rs25.98 per unit for next fiscal, down 3.77%

ISLAMABAD: In a significant move that could ease electricity pricing pressure, the National Electric Power Regulatory Authority (Nepra) has slashed the national average Power Purchase Price (PPP) to Rs25.98 per unit for the fiscal year 2025-26 — down 3.77 percent (or Rs1.02/unit) from the current Rs27/unit.

According to Nepra’s latest determination, the total national Power Purchase Price has been set at Rs3.342 trillion for FY26. For the ex-Wapda Distribution Companies (XWDiscos), the PPP stands at Rs3.066 trillion or Rs26.34 per unit. The calculation excludes K-Electric’s share. Nepra’s decision sets the stage for downstream tariff decisions at the consumer end in the coming months.

Of the total projected PPP for XWdiscos, Rs1.125 trillion is allocated to fuel and variable operation and management (O&M) costs, while a hefty Rs1.941 trillion — or 63 percent — is earmarked for capacity charges, including NTDC, Pak Matiari-Lahore Transmission Company (Pvt.) Ltd. (PMLTC) wheeling costs, and CPPA-G’s MoF. Capacity charges alone are estimated at Rs6.484/unit/month, based on an average monthly Maximum Demand Indicator (MDI) of 24,943 MW.

On a per unit basis, energy charges for XWdiscos are calculated at Rs9.67/unit, while capacity charges make up Rs16.67/unit, resulting in a total of Rs26.34/unit before transmission and distribution (T&D) losses.

The new PPP is Rs1.02/unit less than the ongoing fiscal’s Rs27/unit average, when the total power purchase cost stood at Rs3.534 trillion.

The Central Power Purchasing Agency (CPPA-G), in its petition to NEPRA, outlined seven PPP scenarios for FY26 based on varying assumptions of demand growth (3–5%), exchange rates (Rs280–300/USD), and hydrological flows. Proposed fuel charges range from Rs8.16/unit to Rs9.19/unit, while capacity payments under different scenarios are projected between Rs16.04/unit and Rs16.45/unit — continuing the trend where capacity charges dominate the power purchase cost.

By comparison, for FY24, capacity charges stood at Rs16.22/unit while energy charges were just Rs6.73/unit. The total PPP for 2023-24 was Rs22.95/unit, highlighting a continued upward trend in fixed power costs.