ISLAMABAD: In order to secure the approximately Rs4 trillion in revenue required for power firms in FY25, the government has formally requested a 25% rise in the base national energy rate, which would take effect on July 1, 2025.
In order to review a petition submitted by the Central Power Purchasing Agency (CPPA) of the Power Division on behalf of power companies seeking an increase in the overall power purchase price (PPP) for FY25 by Rs4.40 to Rs6.51 per unit, the National Electric Power Regulatory Authority (Nepra) has scheduled a public hearing for May 23.
In its capacity as the power industry’s commercial agent, the CPPA has put up seven possible scenarios for the sale of electricity in FY25. These projections indicate that sales of electricity are likely to reach 131,000–139,000 gigawatt hours (GwH) in the upcoming year, with a range of 3–5% growth in demand.
According to one estimate, the least increase will be Rs4.40 per PPP unit, rising to Rs6.50 per unit and finally Rs27.11 per unit. Based on the yearly revenue demand of around Rs3.6tr or an average PPP rate of Rs32.75 per unit when compared to Rs26 per unit (Rs2.87tr) in the present year, the CPPA has proposed an increase in PPP of Rs6.80 per unit, or more than 25pc.
Following an increase of almost 25 percent, the average sale rate for the upcoming year is calculated to be Rs37 per unit based on Rs4.07tr, compared to Rs29.78 per unit or Rs3.3tr for the current year. This is after increased distribution margins of roughly Rs385 billion for Discos and approximately Rs80 billion of prior-year adjustments.
Energy purchase price (EPP), which includes variable operations and maintenance costs, has been the reason for the significant rise of over 50% that has been requested. As opposed to Rs840.5bn in the current fiscal year, the EPP for the upcoming fiscal year is reportedly between Rs1.16tr and Rs1.26tr. As a result, the estimated per-unit EPP for the following year is Rs11.45, up from Rs7.63 for the present year, or an increase of Rs3.8.
The capacity payment price (CPP), which is currently Rs17 per unit, is expected to climb by another 16 percent, or Rs2.8 per unit, to Rs19.8 per unit. This indicates that, in comparison to the current fiscal year’s Rs1.87tr, the total capacity payments would approach Rs2.2tr.
Furthermore, 66 paise per unit has been included in for distribution margin, usage of service price, transmission, and market operating fees, among other things.
The basic power purchase price allowed by the Nepra for the current fiscal year is Rs20.60 per unit (kwh). This means that the base rate for discos is Rs23 per unit, and when the distribution margin for discos is taken into account, the average sale rate for customers is higher at Rs29.78 per unit. Taxes, levies, and duties that are subsequently included in the consumer tariff are not included in these figures.
Based on the income requirements that the regulator has already authorized for individual distribution companies (Discos) in recent months, this will serve as the foundation for a circular debt management plan that the International Monetary Fund will approve later this year as part of the next bailout package.
For the current fiscal year, the Nepra has set a basic electricity purchase price of Rs20.60 per unit (kwh). This indicates that the basic price of discos is Rs. 23 per unit, while the average sale rate for clients is higher at Rs. 29.78 per unit when the disco distribution margin is considered. These figures do not include taxes, levies, or duties that are later included in the consumer tariff.
The circular debt management plan that the International Monetary Fund will approve later this year as part of the next bailout package will be based on the income requirements that the regulator has already authorized for individual distribution companies (Discos) in recent months.
