ISLAMABAD : National Electric Power Regulatory Authority (NEPRA) has proposed a study be conducted to reduce he rising Part Load Adjustment Charges (PLAC) through effective demand side as PLAC has reached Rs 29.8 billion after addition of Rs 2.6 billion in March 2025.
This issue has been pointed out by Member ( Technical) Rafique Ahmad Shaikh, in his additional note on determination of Discos FCA for the month of March 2025.
He said serious efforts are being made across various forums to reduce electricity costs, several persistent issues—especially poor governance—continue to drive up electricity prices in Pakistan.
However, he has outlined the following key challenges to help guide relevant stakeholders toward building a more efficient and sustainable power sector ;(i) power generation in March 2025 was 8.5% below the reference level, partly due to AT&C-based load shedding. This AT&C based load shedding not only worsens public hardship but also results in underutilization of ‘Take or Pay’ power plants, driving up costs. In March 2025, ‘Take or Pay’ thermal power plants, with a total capacity of 20,248 MW, operated at only 34.29% utilization. Enhancing governance at the DISCO level is essential to effectively eliminate aggregate Technical and Commercial losses ;(ii) the continued outage of Steam Turbine Unit 16, ongoing since July 2022, at the Guddu 747 MW Power Plant resulted in Rs. 0.68 billion in losses for March 2025, raising total losses for FY 2024-25 (up to March) to Rs. 6.41 billion ;(iii) operating the Guddu 747 MW power plant in open cycle mode led to reduced output from this cost effective source, requiring the shortfall to be met through more expensive, marginal-cost plants. This shift added Rs 24 billion in extra costs in March 2025 alone, with total additional costs reaching Rs. 110 billion during FY 2024-25 (up to March). Progress on resolving the damaged steam turbine issue requires accelerated efforts ;(iv) Neelum Jhelum 969 MW hydropower plant has been out of operation since May 2024. Its non-availability in March 2025 forced reliance on costlier alternatives, resulting in an additional Rs. 4.5 billion in costs compared to March 2024. The total financial impact for FY 2024-25 (up to March) has reached Rs. 28 billion. Resolving the issue requires more concerted and focused efforts ;(v) the HVDC infrastructure operated at only 32% utilization in March 2025, while consumers continued to bear full capacity charges. Among other factors, a key reason for this underutilization is the delayed completion of the Lahore North Grid Station. Efforts must be intensified to complete the task without any further delay ;(vi) Transmission and grid system constraints led to losses of Rs. 0.62 billion in March 2025, bringing the cumulative impact to Rs. 12.31 billion for FY 2024-25 (up to March). Efforts should be intensified to quickly remove transmission constraints that are harming the sector’s financial viability ; and (vii) Part Load Adjustment Charges (PLAC) amounted to Rs. 2.6 billion in March 2025, bringing the total to Rs. 29.8 billion for FY 2024-25 (up to March). These charges are expected to rise further, as PLAC schedules for some power plants are still being finalized. A study should be conducted to reduce PLAC through effective demand-side management.
He was of the view that March 2025 FCA includes a negative prior period adjustment of approximately Rs. 3.29 billion. Excluding this, the FCA would have reflected a positive adjustment of Rs. 0.37/kWh. Prior period adjustments, whether positive or negative, are undesirable. To minimize their occurrence and impact, invoicing, verification, and adjustment processes should be improved, with any such adjustments limited to a maximum period of not more than two months.
In his additional note on KE’s FCA for February 2025, Member (Technical ) stated that the successful enhancement of the interconnection between K-Electric and the National Transmission and Despatch Company (NTDC) to a safe operating limit of 1,600 MW is a commendable step. However, efforts to further increase this capacity to 2,000 MW and beyond—originally targeted for completion by June 2024—remained incomplete. In February 2025, the fuel cost in KE’s generation mix stood at Rs. 20.01/kWh, significantly higher than NTDC’s average of Rs. 8.23/kWh.
” If the interconnection capacity had been upgraded as planned, increased reliance on NTDC’s lower-cost surplus power could have further reduced the Fuel Cost Adjustment, easing the financial burden on consumers,” he said adding that in light of the current surplus of economical generation within the NTDC system and the high cost of KE’s internal generation, it is imperative that the interconnection upgrade be completed without further delay.
Ends
