ISLAMABAD: The National Electric Power Regulatory Authority (Nepra) on Wednesday questioned the Central Power Purchasing Agency–Guaranteed (CPPA-G) over the use of expensive re-gasified liquefied natural gas (RLNG) for power generation in November 2025, despite cheaper options such as imported and local coal being available under the Economic Merit Order (EMO).
The issue was raised during a public hearing on CPPA-G’s request for fuel cost adjustment (FCA) for November 2025. The hearing was chaired by Nepra Chairman Waseem Mukhtar, while Member (Development) Maqsood Anwar Khan and Member (Law) Amina Ahmed attended via Zoom.
CPPA-G has sought a negative adjustment of 72 paisa per unit to refund Rs5.61 billion to electricity consumers across the country, including Karachi, excluding lifeline consumers.
Briefing the Authority, CPPA-G Chief Executive Officer Rihan Akhtar said the FCA impact of 88 paisa per unit for October 2025, recovered in December, would be replaced with a negative adjustment of 72 paisa per unit in January 2026, resulting in a net impact of 16 paisa per unit. He attributed the negative FCA mainly to higher hydropower generation, which stood at 39.2% in November against a reference of 31.9%.
Nepra’s Member (Development) sought an explanation for the increased reliance on RLNG-based plants, which are more expensive than coal-fired generation. The CEO said RLNG generation was assumed at 5.2% for November but actual usage surged to 21.59%. He explained that RLNG plants were utilised due to their proximity to load centres, grid stabilisation requirements and “take-or-pay” contractual obligations. Reference RLNG generation was 0.43 million units, while actual generation reached 0.70 million units.
He further stated that CPPA-G had requested 180 million cubic feet per day (MMCFD) of RLNG for November but consumed 150 MMCFD, accounting for 83% of total demand. SNGPL, he added, had repeatedly raised concerns over lower gas offtake, which created line-pack issues for the gas utility.
Sharing consumption trends, the CEO said domestic electricity consumption declined by 2.8% during July–November 2025 compared to the same period last year. Commercial consumption rose by 1.7%, general services declined by 2.5%, while industrial consumption jumped by 26.4% due to the incremental package. Agricultural consumption declined by 1.7%, possibly due to weather conditions.
On K-Electric’s drawl from the national grid, he said that had KE not been supplied electricity, consumer costs would have increased by Rs3.28 per unit, including 28 paisa FCA and Rs3 per unit capacity charges for November 2025.
Representing the Karachi Chamber of Commerce and Industry (KCCI), Tanveer Barry questioned the sharp rise in local coal power cost from Rs13.10 per unit in October 2025 to Rs17.77 per unit in November. He also cited FBR data showing a 30% decline in tax collection from electricity bills in Karachi during July–November 2025, indicating reduced industrial consumption.
Barry further pointed out that despite Nepra’s load-shedding survey, Karachi continued to face power outages. He said inefficiencies of distribution companies were being passed on to compliant consumers, while electricity theft persisted. He also criticised the incremental package, stating that the assumed 60% load factor did not reflect actual industrial operations, which typically ranged between 16% and 30%.
Another intervener, Rehan Jawed, asked about the impact of shifting captive power plants from gas to the national grid. The CPPA-G CEO said the data was not readily available but would be shared later.
Responding to concerns over rising local coal costs, the CEO explained that Thar coal pricing comprised fixed and variable components. During winter, lower demand increased the fixed cost burden, pushing per-unit prices higher. Higher utilisation, he said, would reduce costs.
The hearing also discussed Rs1.8 billion expenditure by the Power Planning and Monitoring Company (PPMC). Nepra said it had not approved such costs through DISCOs’ annual tariff petitions and sought clarification from the Power Division. As no Power Division representative attended the hearing, Nepra decided to issue a letter expressing concern over the absence.
Nepra officials also informed the forum that the forensic audit of Halmore Power Company had not yet been completed. They added that plans to hire consultants for third-party audits of DISCOs and CPPA-G data had been shelved, with audits instead being conducted internally, by the Auditor General of Pakistan and M/s Ferguson.
Story by Mushtaq Ghumman
