ISLAMABAD: The National Electric Power Regulatory Authority (NEPRA) has approved a positive Fuel Charges Adjustment (FCA) of Rs2.3673 per unit for September 2026 electricity consumption, which will be reflected in November bills of consumers served by ex-WAPDA distribution companies (XWDISCOs) and K-Electric.
Thank you for reading this post, don't forget to subscribe!The approved adjustment is lower than the Rs2.5624 per unit initially sought by the Central Power Purchasing Agency-Guaranteed (CPPA-G), following regulatory adjustments in fuel costs, transmission losses and other components of the monthly calculation.
The adjustment will apply uniformly to consumers of XWDISCOs and K-Electric under the government’s uniform tariff policy, except lifeline consumers, electric vehicle charging stations and prepaid electricity consumers who have opted for prepaid tariffs. It will also apply to electricity consumption under the Incremental Consumption Package (ICP).
NEPRA has directed distribution companies to include the adjustment in November 2026 electricity bills. Where bills have already been issued before the notification, the amount may be recovered in the subsequent billing month. The FCA will be separately reflected in bills based on units consumed during September.
CPPA-G filed its FCA petition on October 15, 2026, claiming an actual fuel cost of Rs10.0220 per unit against the reference fuel cost of Rs7.4596 per unit. NEPRA subsequently conducted a public hearing on October 29, attended by power sector entities, government representatives, consumers and other stakeholders.
According to CPPA-G, electricity generation during September increased by 0.98 per cent compared with the reference generation assumed in the tariff. However, the generation mix changed significantly, with greater reliance on imported coal and reduced generation from hydel, local coal and RLNG-based power plants.
Imported coal generation increased from 1.14 billion units in the reference mix to 2.16 billion units, while its fuel cost rose from Rs11.78 to Rs17.23 per unit. In contrast, local coal generation declined from 1.48 billion to 1.33 billion units, while hydel generation fell from 5.05 billion to 4.83 billion units.
RLNG-based generation also dropped from 1.48 billion to 0.80 billion units, with its fuel cost recorded at Rs39.74 per unit. Meanwhile, gas-based generation increased from 0.76 billion to 1.07 billion units, with fuel costs rising to Rs13.04 per unit.
The regulator also noted the high costs associated with generation from expensive fuels. Electricity generated through high-speed diesel (HSD) carried a fuel cost of Rs62.14 per unit, while furnace oil-based generation cost Rs44.86 per unit.
During the hearing, stakeholders raised concerns over the preference for imported coal over locally available coal, expensive HSD and RLNG-based generation, transmission losses and the resulting financial burden on consumers. CPPA-G maintained that power plants were dispatched according to the Economic Merit Order, subject to operational constraints and system requirements.
NEPRA also reviewed previous-period adjustments amounting to Rs5.759 billion and examined a negative adjustment of Rs10.617 billion claimed by CPPA-G in connection with indigenous gas supplied to RLNG-based power plants under a special arrangement approved by the Economic Coordination Committee (ECC).
Under the arrangement, indigenous gas supplied to RLNG-based power plants in place of imported RLNG from April 1 to October 31, 2026, was to be charged at Rs2,000 per MMBTU.
Although the regulator observed that plant-wise details and supporting calculations had not been provided, it provisionally allowed the negative adjustment, noting that it would provide greater relief to consumers. CPPA-G was directed to submit the required supporting information with its next monthly FCA petition.
The authority also scrutinised transmission and transformation losses reported by the National Grid Company (NGC). It capped applicable losses at the approved 2.50 per cent for the 500kV and 220kV networks, while allowing up to 4.3 per cent for the PMLTC HVDC line.
NEPRA further reviewed electricity procured through net metering, net billing and bilateral arrangements with small power producers and captive power plants. CPPA-G reported 170.389 GWh of electricity procured from net metering and net billing consumers during September, alongside 12.795 GWh supplied through bilateral arrangements.
Distribution companies were directed to reconcile bilateral electricity purchases, provide complete monthly details of energy and associated costs, and certify that such procurement complied with the Economic Merit Order and NEPRA-approved rates.
After incorporating the regulatory adjustments and accounting for electricity procured through CPPA-G, bilateral contracts and net metering, NEPRA determined the national average FCA at Rs2.3673 per unit.
The regulator also directed CPPA-G to ensure proper inter-DISCO settlement of individual distribution companies’ fuel adjustments against the uniform FCA charged to consumers.
NEPRA clarified that CPPA-G would remain responsible for any subsequent variations, errors, omissions or misstatements identified in the submitted data, with the resulting financial impact to be incorporated into future monthly fuel cost adjustments.
Story by Mushtaq Ghumman
