Nepra flags Rs1.5 per unit burden on consumers – Pakistan

• Member from Sindh calls on govt to take urgent corrective measures
• Rehabilitation of Neelum-Jhelum, Guddu plants moving too slowly
• Thermal power plants operated at just 24pc capacity in February

ISLAMABAD: Amid recent tariff reduction moves by the government, the National Electric Power Regulatory Authority (Nepra) has expressed concern over more than Rs1.5 per unit extra burden on electricity consumers due to poor operations of just a couple of generation and transmission projects in the first eight months (July to February) of the current fiscal year.

In a special note to the government, Nepra’s technical member from Sindh, Rafique A. Shaikh, has called upon the government and its power companies to take swift corrective actions, particularly in relation to the 4,000MW Lahore-Matiari Transmission Line, 969MW Neelum-Jhelum Hydropower Plant and 747MW Guddu Power Plant.

Mr Shaikh put on record that “the utilisation of thermal power plants was around 24 per cent in February 2025, while the HVDC (high-voltage direct current) system operated at just 23pc during the same period. This underutilisation is adver­sely impacting consumers”.

Earlier in November, Mr Shaikh had drawn the government’s attention to the low-capacity utilisation of the said system. “The average utilisation factor of the HVDC during September 2024 was only 46pc, while consumers are still paying for a 100pc capacity factor,” he pointed out on Nov 6. Capacity utilisation dropped by half in February.

Despite lower utilisation, the consumers are compelled to pay for the full transmission capacity. Not only this, but cheaper coal-based plants in the southern part of the country then remain unutilised or operated at low capacity despite the accrual of their maximum factor in the power tariff. On top of that, expensive power plants in the northern region are then operated to ensure grid stability, again at a significant cost to consumers.

The Nepra member also pointed out that due to the Guddu plant operating in an open-cycle mode, the financial loss for February amounted to Rs600 million, with the cumulative loss for FY25 reaching Rs5.7 billion.

“Due to reduced generation from the 747MW Guddu plant operating in an open-cycle mode, the system had to rely on costlier fuel plants, resulting in a financial loss of Rs22bn for February 2025. The cumulative loss since the outage has reached Rs107bn,” he said.

Moreover, he highlighted the continuous closure of the Neelum-Jhelum power project for months, which had an additional financial impact on the national average tariff.

“Due to the outage of the 969MW Neelum-Jhelum Hydropower Plant, reliance on costlier fuel plants led to a financial loss of Rs0.8bn in February 2025. The cumulative loss for FY25 has reached Rs23.7bn,” he said.

Mr Shaikh noted that system constraints and contractual obligations in February alone resulted in losses of Rs1.98bn, contributing to a total impact of Rs11.69bn over the first eight months of FY25.

“These inefficiencies demand immediate corrective actions to optimise asset utilisation, reduce costs, enhance reliability and minimise financial losses,” he emphasised.

He noted that the rehabilitation of the Guddu and Neelum-Jhelum pla­nts was progressing too slowly, and urgent repairs and restoration were needed for these facilities.

“Furthermore, the south-north transmission constraint must be urgently addressed, as it is limiting the effective utilisation of cheaper generation in the south and contributing to the underutilisation of the HVDC line,” he said, seeking swift action from all relevant stakeholders.

KE sales drop

In a separate note, Mr Shaikh pointed out that K-Electric experienced an 8pc decline in January in overall electricity sales compared to the same month of last year. The most significant drop occurred in industrial sales, which saw a notable reduction of 8.3pc.

“This sharp decline warrants immediate investigation and attention from all relevant stakeholders to understand the underlying causes and take corrective action,” he said.

Furthermore, the ongoing delay in the execution of the interconnection arrangement between the National Transmission and Despatch Company (NTDC) and K-Electric is adversely impacting the fuel costs associated with K-Electric’s generation mix.

“In January 2025, KE’s own power plants contributed 4pc to the energy mix, while 7pc of electricity came from purchases from IPPs (independent power producers), with the NTDC supplying the remaining 89pc,” he said.

He noted that the cost of generation from the NTDC system was significantly lower, at Rs11.15 per unit, compared to K-Electric’s own generation cost of Rs23.83 per unit.

“Given that NTDC has a surplus generation capacity and its facilities are in close proximity to K-Electric, it is essential for both parties to prioritise the completion of the interconnection works and associated studies,” Mr Shaikh said.

This would not only improve cost efficiency but also enhance the overall performance of the power system, he added.

He advised that expediting the interconnection process and addressing the contractual regasified liquefied natural gas or RLNG obligations were pivotal to optimising operational costs and ensuring long-term sustainability for both K-Electric and NTDC.

Published in Dawn, April 7th, 2025