ISLAMABAD: The National Electric Power Regulatory Authority (Nepra) has notified use-of-system charges (UoSC) ranging from Rs6.23 to Rs19.62 per unit for bulk power consumers (BPCs) of distribution companies, including K-Electric, participating in Pakistan’s competitive electricity trading market.
The decision is expected to pave the way for the launch of competitive power trading under the Competitive Trading Bilateral Contract Market (CTBCM), allowing eligible consumers to purchase electricity from private suppliers and use the national grid to transport power to their facilities.
Under the framework, consumers participating in the upcoming 400-megawatt (MW) competitive wheeling auction will pay the notified charges in addition to the electricity supply price negotiated with private-sector generators. The UoSC covers transmission and distribution costs, fixed grid charges and cross-subsidies.
According to the notified rates, B-3 industrial consumers participating in the auction will pay Rs6.23 per unit, while B-4 industrial consumers will be charged Rs9.09 per unit. C-2 and C-3 single-point distribution consumers will face charges ranging from Rs14.95 to Rs19.62 per unit, while A-2 and A-3 general supply consumers will pay Rs19.14 per unit. Agricultural consumers will be charged Rs6.72 per unit.
For bulk power consumers not participating in the competitive wheeling auction, the notified charges are considerably higher, ranging from Rs19.17 to Rs32.56 per unit, depending on the consumer category. B-3 and B-4 consumers will pay Rs19.17 and Rs25.45 per unit, respectively, while C-2 and C-3 consumers will face charges of Rs31.30 and Rs32.56 per unit. A-2 and A-3 consumers will pay Rs32.08 per unit, and agricultural consumers will be charged Rs19.66 per unit.
In addition, a fixed grid charge of Rs1 per kilowatt per month, calculated on the basis of sanctioned load, will apply to both categories of consumers.
Pakistan currently has slightly more than 3,000 bulk power consumers nationwide. The notification establishes a uniform use-of-system charging framework for consumers of all distribution companies and K-Electric seeking access to the competitive electricity market.
The commercial market operation date for CTBCM was previously declared as January 22, 2026, with the first auction initially scheduled for June. However, the auction was delayed pending the determination and notification of wheeling charges.
The Independent System and Market Operator (ISMO), a new entity in the power sector, is expected to conduct the first 400MW auction within the next couple of months. The government has allocated a total of 800MW for competitive auctions in two phases, with electricity generation capacity to be sold through competitive bidding for five years. The allocated capacity may gradually increase following the initial trial, subject to government approval.
Nepra forwarded its determination to the federal government after considering input from the Power Division, ISMO, K-Electric and bulk power consumers regarding the calculation and settlement of charges, including inter-distribution company differentials, cross-subsidies and transmission and distribution losses.
Under government directives, the financial impact of differences between distribution companies’ charges will not be borne exclusively by consumers using the competitive wheeling mechanism. Nepra has also circulated a draft adjustment mechanism to settle inter-Disco differentials among relevant stakeholders.
The regulator said the central principle was to ensure that use-of-system charges for open-access consumers remained equivalent to those applicable to similarly placed consumers served by suppliers of last resort (SOLRs).
To account for network losses, Nepra determined a uniform loss factor of 8.04 per cent for consumers connected at the 11-kilovolt level, based on the transmission and distribution losses of individual distribution companies. For consumers connected at 132kV, it approved a uniform loss factor of 1.51 per cent, as proposed by the Power Division.
Nepra further ruled that any additional charges required to cover differences among distribution companies or K-Electric would apply to all consumers, including open-access customers and those supplied by SOLRs, to maintain uniformity.
The federal government had earlier approved framework guidelines for competitive wheeling auctions covering 800MW of electricity, alongside plans to move towards integrated energy planning nationwide. ISMO is expected to announce the auction calendar and detailed procedures following Nepra’s approval of the relevant process.
Under the auction framework, bid values will have no upper or lower limits and will remain fixed for one year. The introduction of competitive power trading is intended to expand consumer choice, facilitate direct electricity procurement and gradually develop a more competitive wholesale electricity market in Pakistan.
Story by Khaleeq Kiani
