NEPRA to Pass Rs53.4 Billion Tariff Refunds to Consumers: A Relief in Sight?
In a major development aimed at easing the financial burden on electricity consumers, the National Electric Power Regulatory Authority (NEPRA) is preparing to refund a staggering Rs53.4 billion under Quarterly Tariff Adjustment (QTA) for the fourth quarter (April–June) of the fiscal year 2024–25. This decision—expected to be finalized following a public hearing scheduled on August 4—is one of the most significant downward adjustments in recent years and could bring a sigh of relief for millions of consumers across Pakistan.
Why Are These Refunds Being Proposed?
The petition was submitted by the Central Power Purchasing Agency-Guarantee (CPPA-G), primarily citing lower capacity payments due to successful negotiations with independent and government-run power producers. These settlements have reduced power generation costs, thus paving the way for refunds.
Key statistics from the CPPA-G’s application include:
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Faisalabad Electric Supply Company (FESCO): Rs15.579 billion
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Lahore Electric Supply Company (LESCO): Rs12.758 billion
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Multan Electric Power Company (MEPCO): Rs8.467 billion
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Gujranwala Electric Power Company (GEPCO): Rs6.132 billion
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Hyderabad Electric Supply Company (HESCO): Rs6.818 billion
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Peshawar Electric Supply Company (PESCO): Rs2.7 billion
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Islamabad Electric Supply Company (IESCO): Rs1.04 billion
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Sukkur Electric Power Company (SEPCO): Rs504 million
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Tribal Areas Electric Supply Company (TESCO): Rs2.985 billion
However, not all companies are offering relief. Quetta Electric Supply Company (QESCO), in contrast, is seeking to recover Rs3.594 billion from its consumers—highlighting the disparity in operational costs and regional circumstances.
K-Electric Consumers to Receive Uniform Tariff Relief
As per NEPRA’s adherence to the federal policy of uniform electricity tariffs, the proposed refunds will also be extended to K-Electric (KE) consumers. This follows a larger government mandate to ensure pricing parity across the country despite operational differences between K-Electric and other Distribution Companies (DISCOs).
Earlier this month, in a historic regulatory decision, NEPRA notified K-Electric’s long-delayed multi-year tariffs for 2023–2030, even as the federal government’s review motion remains unresolved. This move emphasized NEPRA’s enhanced legal autonomy, especially after the 2021 legal amendment, which empowered the authority to issue tariff notifications without federal intervention.
The newly notified average base tariff for K-Electric is:
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Rs39.97/kWh for FY 2023–24, broken down as:
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Rs31.96/kWh – Power Purchase Cost
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Rs2.86 – Transmission Charges
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Rs3.31 – Distribution Charges
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Rs2.28 – Supply Margin
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(-Rs0.44) – Prior Year Adjustment
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This adds up to a total revenue requirement of Rs606.9 billion for KE, including Rs34.7 billion in supply margin and Rs36.2 billion to cover recovery losses.
External Pressures and Regulatory Push
The move to independently notify tariffs without federal delay has been encouraged by international financial institutions, including the International Monetary Fund (IMF) and the World Bank. These lenders have repeatedly urged Pakistan to depoliticize tariff setting, enhance regulatory transparency, and push long-overdue power sector reforms.
In its official statement, NEPRA warned:
“This situation could impair K-Electric’s financial health and undermine power supply continuity, ultimately affecting consumers and the broader energy market.”
Hence, the decision is not merely financial—it holds strategic importance for the stability of the national grid and energy security.
Economic Implications: A Ray of Hope?
While tariff hikes in the past have triggered inflationary ripples, this downward adjustment signals relief for inflation-fatigued households and industries alike. Lower electricity costs are expected to:
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Reduce household utility bills
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Ease pressure on industrial production costs
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Improve energy affordability for small and medium enterprises (SMEs)
Moreover, extending this relief to K-Electric’s urban consumer base in Karachi—Pakistan’s economic engine—could enhance urban economic activity and consumer confidence.
What’s Next?
NEPRA’s public hearing on August 4 will be a key event to watch. The outcome will not only decide the fate of the Rs53.4 billion refund but also reinforce NEPRA’s independence and regulatory role in steering the energy market reforms.
Stay tuned to updates on NEPRA’s official website and follow CPPA-G notices for the latest documentation on tariff petitions.
Final Thoughts
This development is a significant win for transparency, economic relief, and regulatory reform in Pakistan’s power sector. The refunds, if approved, would provide short-term financial relief and long-term credibility to the pricing system. It also demonstrates Pakistan’s growing resolve to meet IMF structural benchmarks while keeping consumer interest intact.
For more such updates on energy reforms, tariffs, and business policies, visit our Economy section.