NewzShewz
No Result
View All Result
Thursday, October 22, 2026
  • Home
  • Finance
  • Politics
  • Energy
  • International
NewzShewz
  • Home
  • Finance
  • Politics
  • Energy
  • International
No Result
View All Result
NewzShewz
No Result
View All Result
Home Energy

NEPRA approves UoSC for PBCs of Discos /KE, paving way for launch of competitive electricity wholesale market

by NewzShewz Desk
September 7, 2026
in Energy
0
Power Minister seeks justification of Moro-Matiari Transmission Line
98
VIEWS
Share on FacebookShare on Twitter

ISLAMABAD: The National Electric Power Regulatory Authority (NEPRA) has approved a uniform structure of Use of System Charges (UoSC) for power bulk consumers (PBCs) of distribution companies (Discos) and K-Electric (KE), paving the way for the launch of a competitive wholesale electricity market.
The decision is expected to facilitate the federal government’s plan to auction 400 MW of electricity in the first phase, instead of the 200 MW initially envisaged under the competitive wheeling framework.
NEPRA announced the determination after considering submissions from the Power Division, Independent System and Market Operator (ISMO), K-Electric and other stakeholders on the mechanism for determining and settling UoSC, including inter-DISCO differentials, cross-subsidies and transmission and distribution (T&D) losses.
The Power Division had proposed that the impact of inter-DISCO differentials arising from the uniform application of UoSC should not be imposed exclusively on wheeling consumers.
A draft adjustment mechanism for settling inter-DISCO differentials had been prepared and circulated among the Power Division and other stakeholders for comments.
In a letter dated July 30, 2026, the Power Division supported the proposed adjustment mechanism and reiterated its position that the impact of differentials should be passed on to wheeling consumers.
However, ISMO and K-Electric opposed the proposal, arguing that it could result in different UoSC for open-access consumers compared with similarly placed consumers supplied by suppliers of last resort (SOLRs). They also maintained that charging such differential costs to wheeling consumers would not be consistent with the National Electricity Policy 2021 and National Electricity Plan 2023-27.
Subsequently, the Power Division, in its communication of August 5, 2026, informed NEPRA that a meeting had been held on August 3 under the chairmanship of the Minister for Energy to clarify the government’s position on the adjustment mechanism for UoSC, including cross-subsidisation and T&D losses.
The Power Division reaffirmed that the same and uniform UoSC, including cross-subsidy, should apply to equally placed consumers irrespective of their supplier.
It argued that any inter-DISCO differential arising from the uniform application of UoSC should instead be settled through an inter-DISCO settlement mechanism similar to the existing arrangement for the uniform end-consumer tariff.
ISMO subsequently submitted a draft mechanism on August 12 for settlement of inter-DISCO UoSC differentials.
After considering the submissions, NEPRA held that the paramount principle was to ensure that UoSC applicable to open-access consumers remained equal to those applicable to similarly placed consumers of SOLRs.
The regulator concluded that imposing inter-DISCO differentials exclusively on wheeling consumers would result in different UoSC for them and undermine the principles of uniformity and non-discrimination.
Accordingly, NEPRA agreed with the Power Division that such differentials should not be passed on exclusively to wheeling consumers.

The regulator also approved uniform T&D loss factors for open-access consumers.

Based on the T&D losses of individual Discos, NEPRA determined that the uniform loss factor at the 11kV level worked out to 8.04 percent, instead of the 8.42 percent claimed by the Power Division.
For consumers connected at 132kV, the regulator approved a uniform loss factor of 1.51 percent, as proposed by the Power Division.

Under the approved structure, uniform variable grid charges for consumers participating in the competitive wheeling auction process range from Rs6.23 to Rs19.62 per unit, depending on the consumer category. A fixed grid charge of Rs1 per kW per month, based on sanctioned load, will also be applicable.
The approved variable UoSC for different categories are: Rs6.23/kWh for B-3, Rs9.09/kWh for B-4, Rs14.95/kWh for C-3, Rs19.62/kWh for C-2(a), Rs17.74/kWh for C-2(b), Rs19.14/kWh for A-2(c), Rs19.10/kWh for A-3 and Rs6.72/kWh for D-2(b).
The UoSC comprises transmission charges, distribution charges and cross-subsidy.
For instance, the Rs6.23/kWh UoSC for B-3 consumers comprises Rs1.60/kWh transmission charges, Rs1.99/kWh distribution charges and Rs2.63/kWh cross-subsidy.
Similarly, the Rs9.09/kWh charge for B-4 consumers comprises Rs1.26/kWh transmission charges, Rs2.78/kWh distribution charges and Rs5.05/kWh cross-subsidy.
NEPRA also approved stranded-cost components for consumers opting for open access without participating in the competitive wheeling auction.
The stranded-cost component has been set at Rs12.94/kWh for consumers connected at 11kV and Rs16.35/kWh for consumers connected at 132kV/66kV.
Consequently, the total variable UoSC, including stranded costs, has been determined at Rs19.17/kWh for B-3, Rs25.45/kWh for B-4, Rs31.30/kWh for C-3, Rs32.56/kWh for C-2(a), Rs30.68/kWh for C-2(b), Rs32.08/kWh for A-2(c), Rs32.04/kWh for A-3 and Rs19.66/kWh for D-2(b).
The federal government had specifically sought application of uniform UoSC to K-Electric, arguing that any resulting financial gap should be addressed through an additional charge rather than through a government subsidy.
NEPRA decided that the additional charge would be applied to all consumers, including open-access consumers and consumers of SOLRs, thereby maintaining the principle of uniformity.
On the issue of differentials arising from uniform T&D losses, NEPRA noted that although ISMO had proposed a settlement mechanism, the proposal had not yet been thoroughly deliberated among all stakeholders.
The regulator further observed that the National Electricity Plan 2023-27 requires NEPRA to prescribe a mechanism for settling inter-DISCO differentials arising from the application of uniform UoSC, but does not specifically require a mechanism for energy differentials resulting from uniform T&D losses.
NEPRA, therefore, decided not to approve any mechanism for such differentials at this stage.

The Power Division, Discos, ISMO, K-Electric and other relevant entities have been directed to deliberate on the matter and determine, during the proceedings for next year’s UoSC, whether implementation of uniform T&D losses actually results in such differentials. If so, they will be required to propose a mechanism for their settlement after consultation with all relevant stakeholders. Ends

Related Posts

PC Board approves prequalification of 10 parties for IESCO privatisation
Energy

PC Board approves prequalification of 10 parties for IESCO privatisation

by NewzShewz Desk
October 22, 2026
0

ISLAMABAD : The Privatisation Commission (PC) Board, in its 260th meeting held today under the chairmanship of Mr. Muhammad Ali,...

Read more
Finance Minister Chairs Meeting on Gas Sector Reforms, Reviews Restructuring and Deregulation Roadmap
Energy

Finance Minister Chairs Meeting on Gas Sector Reforms, Reviews Restructuring and Deregulation Roadmap

by NewzShewz Desk
October 19, 2026
0

Federal Minister for Finance and Revenue, Senator Muhammad Aurangzeb, chaired a high-level meeting to review the proposed restructuring and deregulation...

Read more
  • Trending
  • Comments
  • Latest
Dasu Transmission Line Controversy Continues

OSD DMD refutes incompetence label , highlights NTDC leadership flaws, WB project issues, corruption, and contractor influence”

June 12, 2025
Investigations into IPPs Undermine Investor Confidence

KE Board…. thank you. We are leaving the meeting

November 13, 2025
Newzshewz Exclusive

NTDC BoD removes ” incompetent ” officials

April 23, 2025
Zargham Eshaq Khan steps down as MD NESPAK

Zargham Eshaq Khan steps down as MD NESPAK

November 1, 2025
Enhanced Rationalization in the Categorization of SOEs

Enhanced Rationalization in the Categorization of SOEs

0
PPIB to extend TLoS of ZSPL

PPIB to extend TLoS of ZSPL

0
CCP Fines Diamond Paint Industries PKR 5 million

CCP Fines Diamond Paint Industries PKR 5 million

0
Steering Committee on Discos

Steering Committee on Discos

0
PC Board approves prequalification of 10 parties for IESCO privatisation

PC Board approves prequalification of 10 parties for IESCO privatisation

October 22, 2026
Finance Minister Chairs Meeting on Gas Sector Reforms, Reviews Restructuring and Deregulation Roadmap

Finance Minister Chairs Meeting on Gas Sector Reforms, Reviews Restructuring and Deregulation Roadmap

October 19, 2026
Renegotiation of IPP Deals: Politics at the Cost of Investment

Expensive RLNG, imported coal, previous adjustments drive up September power costs

October 17, 2026
NEPRA okays new financing mechanism for 59 IPPs of different technologies

CPPA-G seeks positive FCA adjustment of Rs 2.56/kWh for September 26

October 15, 2026
  • Home
  • About
  • Contact Us
  • Privacy Policy
  • Cookie Policy
  • Terms and Conditions
Contact us: contact@newzshewz.com

No Result
View All Result
  • Home
  • Finance
  • Energy
  • International
  • Politics
This website uses cookies. By continuing to use this website you are giving consent to cookies being used. Visit our Privacy and Cookie Policy.