Electricity consumers are set to receive a significant financial relief as Ex-WAPDA Distribution Companies (Discos) have requested approval from the National Electric Power Regulatory Authority (NEPRA) to reimburse Rs 52.123 billion under Quarterly Tariff Adjustments. This development primarily stems from a reduction in capacity payments.
During the second quarter of the fiscal year 2024-25, Discos’ capacity payments witnessed a sharp decline, mainly due to the termination of contracts with five Independent Power Producers (IPPs), improvements in the economy, and decreased transmission and distribution (T&D) losses.
As per the established tariff guidelines, XWDISCOs have submitted applications for adjustments related to capacity charges, transmission costs, market operator fees, the impact of incremental electricity consumption, and variations in T&D losses on Fuel Charges Adjustments (FCA), along with operational and maintenance costs for October–December 2024. In separate petitions filed with NEPRA, Faisalabad Electric Supply Company (FESCO), Gujranwala Electric Power Company (GEPCO), Islamabad Electric Supply Company (IESCO), Lahore Electric Supply Company (LESCO), Multan Electric Power Company (MEPCO), Peshawar Electric Supply Company (PESCO), Quetta Electric Supply Company (QESCO), Sukkur Electric Supply Company (SEPCO), and Tribal Areas Electricity Supply Company (TESCO) have sought permission to reimburse Rs 52.123 billion to consumers as part of the quarterly adjustment for the second quarter of FY 2024-25.
Documents submitted by Discos highlight cost savings across multiple categories, as approved by NEPRA, to account for operational and maintenance expenditures. The most substantial portion of negative adjustments arose from reductions in capacity payments, which dropped by Rs 50.658 billion during this quarter.
Faisalabad Electric Supply Company recorded the highest savings in capacity payments at Rs 10.282 billion, followed by Multan Electric Power Company with Rs 9.942 billion, Lahore Electric Supply Company at Rs 8.808 billion, Gujranwala Electric Power Company at Rs 5.952 billion, and Islamabad Electric Supply Company at Rs 4.284 billion. Tribal Areas Electricity Supply Company reported Rs 3.152 billion in savings, Sukkur Electric Supply Company Rs 2.791 billion, Peshawar Electric Supply Company Rs 2.147 billion, Quetta Electric Supply Company Rs 1.827 billion, and Hyderabad Electric Supply Company Rs 1.473 billion.
Further, Rs 2.644 billion in savings was attributed to reduced transmission and distribution losses, Rs 1.326 billion to lower system charges and market operation fees (UoSC & MoF), and Rs 1.66 million due to fixed-cost recoveries from incremental units. However, operation and maintenance costs for Discos increased by Rs 2.691 billion during this period.
The decrease in capacity payments is mainly a result of the federal government’s decision in October 2024 to terminate agreements with five IPPs, collectively supplying 2,400 MW. Additionally, economic recovery has led to a rise in electricity consumption, which in turn reduced capacity payments.
Enhanced efficiency in managing transmission and distribution losses has also contributed to consumer benefits. Notably, for the first half of the fiscal year (July–December 2024), Discos’ tariffs have consistently declined compared to the reference tariff, enabling substantial refunds to consumers through monthly Fuel Charges Adjustments.
NEPRA has scheduled a public hearing on these petitions for February 12.
