Electricity Prices Are Expected To Rise In September and November | NEPRA Adds Rs. 1.7 Per Unit To Bills

This is the latest shocking news for all Pakistani residents from NEPRA, as once again your electricity bills will increase in November and September. This time NEPRA will add 1.7 Rs per unit to your electricity bills across Pakistan.

NEPRA raise electricity bills by 1.743 per unit

For millions of people who are tired of inflation, a new fee of Rs 1.743 per unit starting in September 2024 will make matters worse.

Through quarterly adjustments, distribution businesses, including K-Electric, will be able to recover Rs43.23 billion for the fourth quarter of the fiscal year 2023–2024. The latest extension will cause disruptions to households already struggling with exorbitant energy bills.

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Power costs and the new GST will raise consumers’ bills by Rs51 billion

Independent power producers will receive a significant amount of this recovery as capacity charges to sustain their ability to generate electricity. In addition to the Rs7.3 billion that would be allocated to market operator fees and system usage charges, Rs 11.23 billion would be allocated to transmission and distribution losses, and Rs3.5 billion would be allocated to variable operation and maintenance costs.

Due to the imposition of an 18% general sales tax on the recovery amount, the amount that needs to be recovered from customers would increase to Rs51 billion, burdening the economy by Rs7.78 billion.

The NEPRA rejects a legal cost claim of Rs51 million

Last month, the distribution companies represented by the NEPRA Chairman indicated that changes were needed due to fewer sales than anticipated. According to the national electricity authority, Pesco and other companies used load-shedding because their energy needs weren’t met.

The Central Power Purchasing Agency also requested an additional Rs51 million for legal fees in this adjustment; however, NEPRA denied this request, noting that legal fees are already covered by the Market Operation Fee (MOF), which is allocated Rs 500 million for legal fees for the fiscal year 2023–2024.

A positive adjustment of Rs43.23 billion was granted by NEPRA

CPPA included Kot Addu Power Company’s claim of Rs 72.23 million for tax differentials, however NEPRA rejected it. Additionally, Rs 73.18 million was changed to reflect the January 2024 PPIB fee.

For the fourth quarter of FY 2023–2024, NEPRA granted a positive adjustment of Rs43.23 billion to account for capacity charges, variable operation and maintenance costs, higher recovery on higher sales, system usage charges, market operator fees, and other FCA impacts.

In conclusion

A recent decision by NEPRA to increase electricity rates by Rs. 1.7 per unit will have a significant impact on Pakistani consumers in the near future. An 18% GST will be imposed on consumers, along with additional charges for capacity payments, operational costs, and transmission losses. The total burden on consumers will be Rs. 51 billion.