NEPRA presents a methodology to lower power prices by Rs25 per unit.

ISLAMABAD – The National Electric Power Regulatory Authority (NEPRA) on Thursday devised a plan to reduce commodities costs by Rs25 per unit.

NEPRA submitted a paper to the government arguing that by lowering per-unit capacity payments and fees, the energy rate might be decreased.

It proposed that power rates may be decreased by addressing operational issues. It was found that of the Rs45.06 per unit cost, Rs17.01 per unit is for capacity costs. Furthermore, customers pay Rs15.28 per unit in tax and fee, while distribution corporations charge Rs3.10 per unit in distribution margin.

NEPRA said that one paisa per unit is collected for maintenance, income generation, and next-year adjustments. Transmission charges are an additional Rs1.37 per unit.

The power regulator indicated that the net average cost of producing energy is Rs7.62 per unit.

According to the NEPRA calculation, removing the Rs7.52 surcharge and making a 67 paisa adjustment will cut the price of energy by Rs25.20 per unit. If the formula is used, a unit of electricity now priced at Rs45.06 will be reduced to Rs20.04 per unit.

On Tuesday, NEPRA issued its State of Industry Report 2024, requesting that the government revisit the Rs15.28 per unit power tariff.

It also identified underutilization of generation capacity as one of the primary concerns facing the electricity sector. By the end of fiscal 2023-24, installed electricity generating capacity had reached 45,888MW, with an average yearly utilisation of only 33.88 percent.