ISLAMABAD: The National Electric Power Regulatory Authority (Nepra) revealed that a projected financial benefit of Rs 60 billion could not be passed on to consumers of Discos and K-Electric (KE) during the first quarter of FY 2024-25. The shortfall stemmed from the closure of the 969 MW Neelum Jhelum Hydropower Project (NJHPP) and debt re-profiling of the Karachi Nuclear Power Plant-2 (Kanupp), both of which hindered the availability of cost-effective electricity.
During a public hearing on quarterly tariff adjustment (QTA) for the period, Nepra officials highlighted that the under-recovery of Rs 60 billion affected projected generation benefits. Discos had initially sought a positive adjustment of Rs 8.71 billion, later revised to Rs 6.477 billion. However, Nepra and CPPA-G determined the actual impact to be Rs 1.36 billion, translating to an adjustment of 9-13 paisa per unit.
Challenges and Criticism
Discos faced criticism for unscheduled load shedding, with allegations of manipulating figures to mask losses. Negative growth in electricity sales, averaging 10.85% across Discos, was attributed to increased solarization. FESCO reported a 50% drop in agricultural sales, while MEPCO cited a similar trend due to tubewells shifting to solar energy.
The Solarization Impact
Solar adoption, particularly among small industries and agriculture, has significantly reduced grid reliance. Nepra Member Law, Ameena Ahmed, called for comprehensive studies on solarization’s impact. CPPA-G representatives noted a 7% rise in power consumption in October, with expectations of further growth under the Winter Package.
Recommendations for Reform
Nepra officials suggested that privatization or public-private partnerships might be the only viable solution for Discos’ operational inefficiencies. Proposals to improve governance included granting autonomy to Discos’ boards and restructuring them into smaller entities.
The session concluded with calls for better data collection on solarization, measures to curb unscheduled load shedding, and strategic deferral of QTA impacts to support industry recovery under the Winter Package.
Story by Mushtaq Ghumman
