Electricity bills likely to jump by Rs1.74 per unit

The National Electric Power Regulatory Authority (NEPRA) has conducted a public hearing following a request from the Central Power Purchasing Agency (CPPA) to increase electricity prices by Rs1.74 per unit for the billing month of June.

The proposed hike aims to recover over Rs16 billion from consumers due to higher fuel cost adjustments (FCA) incurred in April.

CPPA Chief Executive Officer (CEO) Rehan Akhtar stated during the hearing that the reference fuel cost for April was set at Rs8.25 per unit, but the actual cost reached Rs9.975 per unit. He attributed this increase to international disruptions.

“The actual cost turned out to be Rs9.975 per unit, mainly because of the US-Iran war and the resultant disruption in LNG supplies,” Akhtar said.

He noted that the government managed the crisis by limiting furnace oil and diesel use. “The government decided to undertake load management and limit the use of furnace oil and diesel for power generation, which helped contain the additional FCA at Rs1.73 per unit.”

Akhtar further explained that LNG pricing was subsidised to control the tariff hike, stating that the government decided to charge Rs2,000 per unit for its price instead of Rs3,500 per unit under normal circumstances.

The hearing also detailed an 8.5 percent year-on-year drop in April’s overall power consumption, with domestic demand falling by 15 percent, commercial by 9.5 percent, general services by 7.2 percent, agriculture by 53 percent and bulk consumers by 13 percent.

Conversely, industrial consumption grew by 13.5 percent due to captive power plant gas disconnections.

Nepra officials also questioned K-Electric regarding increased power outages in Karachi during high temperatures, noting that complaints originated from both high-loss and low-loss areas where utility schedules were ignored.

Officials stated that power cuts caused by technical faults were also not being accounted for by the power utility under load management schedules, which was against regulatory performance standards.

The regulator directed K-Electric to submit an urgent report. In response, a K-Electric spokesperson issued a statement asserting that its loadshedding practices were aligned with the principles of the National Electricity Policy 2021, while blaming development work in the city by civic authorities for any localised faults that were reported.