Consumers across the country are likely to face higher electricity bills in May 2025, mainly due to a significant drop in hydropower generation and a shift toward more expensive fuel sources to meet rising power needs.
Electricity generation costs have gone up under the Fuel Cost Adjustment (FCA) for April, driven by a 20% surge in electricity demand and a decline in hydropower output.
To fill the gap, authorities had to rely on costly thermal power plants, increasing the overall cost of power production, according to the General Manager of the National Power Control Centre (NPCC), who spoke during a public hearing hosted by the National Electric Power Regulatory Authority (NEPRA).
In a related development, the Central Power Purchasing Agency Guarantee Limited (CPPA-G) has put forward a proposal to slightly reduce the electricity tariff by Rs0.0309 per unit for April under the FCA.
However, NEPRA officials clarified that since consumers had already received a larger refund of Rs0.4641 per unit in April, the net impact will actually be an increase of Rs0.4332 per unit in May bills.
When asked about the continued unavailability of the Neelum-Jhelum hydropower project, NPCC officials confirmed that it is still not contributing to the grid and there’s no timeline for when it might return.
They also mentioned that, if not for prior year adjustment claims from distribution companies (Discos), the FCA for March would have turned out positive too.
If NEPRA approves the requested Rs0.0309 per unit reduction, it would only translate into Rs250 million in savings for consumers, a relatively small amount considering the overall picture.
Despite the rise in fuel cost adjustments, the NPCC General Manager assured the public that there would be no electricity shortages in the coming months, thanks to sufficient fuel supply arrangements.
He emphasized that the higher costs were entirely due to the reliance on more expensive fuel sources.
Supporting this view, CPPA-G CEO Rihan Akhtar also acknowledged that the use of costlier fuels would continue to push the FCA upward in the near future.
During the hearing, several participants raised questions about the long-term energy planning and the mechanisms used to calculate FCA rates.
Amir Sheikh pointed out that captive power plants had been moved to the national grid, which freed up local gas and RLNG, particularly in Sindh and Khyber Pakhtunkhwa.
However, he criticized the lack of clarity on how this gas was allocated and argued that the industrial sector should benefit from this change through increased Fuel Price Adjustment (FPA) refunds.
Separately, NEPRA held another hearing to discuss the quarterly adjustment for the third quarter of fiscal year 2024–25. If approved, consumers could see a relief of Rs1.50 per unit spread over three months.
CPPA-G informed the forum that distribution companies had requested a combined relief of Rs51.493 billion for the period.
This hearing, chaired by the NEPRA chairman, saw participation from business community representatives, journalists, and members of the public.
The authority voiced concern over the absence of senior representatives from power distribution companies such as HESCO, MEPCO, and KESCO, and has decided to seek clarification from those entities.
Once finalized, NEPRA’s decision, applicable to all power distribution companies, including K-Electric, will be officially notified.
K-Electric noted that the proposed adjustment covers the January to March 2025 period and includes system operation costs. The final charges and the timeframe for billing will be outlined in the upcoming official notification.