ISLAMABAD: The National Electric Power Regulatory Authority (NEPRA) has approved a salary increase, performance increments, and limited employee bonuses for the Central Power Purchasing Agency (Guarantee) Limited (CPPA-G) for the fiscal year 2025-26, while significantly trimming several of the company’s proposed operational and administrative expenditures.
The decision was issued as part of NEPRA’s determination on the CPPA-G Market Operation Fee for FY2025-26. The agency had sought approval for a market operation fee of Rs14.67 per kW per month, including prior-year and miscellaneous adjustments, along with a net revenue requirement of Rs4.664 billion.
For employee-related costs, NEPRA approved salary increases based on the average Consumer Price Index (CPI) inflation of 4.49% and allowed performance increments averaging 6%, resulting in a combined increase of 10.49%, slightly lower than the 11% requested by CPPA-G.
The regulator approved Rs1.585 billion for employee salaries and Rs249 million for employee benefits. While CPPA-G had requested Rs199 million, equivalent to 1.5 gross salaries, for employee bonuses, NEPRA approved only one basic salary, amounting to Rs55.64 million.
Regarding staffing, CPPA-G had proposed recruiting dozens of additional employees. However, NEPRA approved costs only for the 26 employees already hired, amounting to Rs109.71 million, and directed that any future recruitment would require separate justification.
The regulator also reduced several requested operational expenses. Against a request of Rs32 million for employee training, only Rs8.58 million was approved based on actual expenditure, noting that the market operator function has since shifted to the Independent System and Market Operator (ISMO).
NEPRA rejected proposals for hiring headhunting consultants, succession planning consultants, and conducting a compensation survey. However, it approved Rs1 million for testing services, Rs0.7 million for a board evaluation consultant, and Rs2 million for tax consultancy services.
Administrative expenses were also scaled back. Of the Rs316 million requested, NEPRA approved Rs271.11 million, reducing allocations for telephone and communication services, board and audit fees, outsourced services, and insurance. The regulator also disallowed all Environmental, Social and Governance (ESG)-related expenditures, stating that such corporate social responsibility activities should not be passed on to electricity consumers.
Similarly, CPPA-G’s request for Rs241 million in repair, maintenance, and IT-related expenses was reduced to Rs137 million, with major cuts in IT services, vehicle expenses, and maintenance costs. While the company had also sought Rs164 million for capital expenditures, NEPRA approved only those expenses deemed essential for operational requirements.
The regulator’s decision reflects an effort to balance operational needs with consumer interests by allowing essential expenditures while curbing non-essential costs amid ongoing challenges in Pakistan’s power sector.
Story by ZAFAR BHUTTA
