NEPRA/Industry grill CPPA-G, PPMC for presenting unreliable data of power sector

ISLAMABAD: National Electric Power Regulatory Authority (NEPRA) and industry on Thursday questioned discrepancies in electricity generation data submitted by the Central Power Purchasing Agency-Guaranteed (CPPA-G), Power Planning and Monitoring Company (PPMC) and Independent System and Market Operator (ISMO), as industrial consumers challenged a proposed Rs32.70 billion increase in fuel charges and demanded greater scrutiny of power generation costs.
At a public hearing on CPPA-G’s request for a positive Fuel Charges Adjustment (FCA) of Rs2.5624 per unit for September 2026, industry representatives questioned the heavy reliance on expensive fuels, the utilisation of cheaper power plants, the treatment of previous-period adjustments and the continued recovery of substantial taxes and levies through electricity tariffs.
The proposed FCA, if approved, would allow the recovery of an additional Rs32.70 billion from consumers through November 2026 electricity bills. It would replace the existing positive adjustment of Rs1.11 per unit, increasing the applicable adjustment by approximately Rs1.45 per unit.
The hearing was presided over by NEPRA Chairman Waseem Mukhtar through an audio link, while Member (Tariff and Finance) Amina Ahmed, Member (Development) Maqsood Anwar Khan and Member (Law) Ghulamullah Shaikh attended physically.
CPPA-G Chief Executive Officer Rihan Akhtar, PPMC Chief Financial Officer Naveed Qaiser and ISMO representatives briefed the regulator on electricity generation, fuel costs and factors contributing to the proposed adjustment.
During the proceedings, NEPRA’s Senior Adviser (Monitoring and Enforcement) questioned the authenticity and consistency of information supplied by PPMC and ISMO, observing that figures provided to the regulator differed from those presented during the public hearing.
Member (Tariff and Finance) Amina Ahmed acknowledged the concerns, indicating that the Authority was aware of discrepancies but did not want to turn the proceedings into a “circus” by taking up every inconsistency publicly.
The observations raised questions about the reliability of data used to determine generation costs and the adjustments ultimately passed on to electricity consumers.
Aamir Sheikh, a representative of industrial consumers expressed concern over the substantial contribution of diesel, high-speed fuel oil (HFO) and re-gasified liquefied natural gas (RLNG) to electricity generation costs, arguing that the fuel mix had pushed up the FCA despite the availability of cheaper generation options.
One industrialist observed that diesel-fired generation accounted for approximately Rs13.262 billion out of total energy generation costs of Rs123.618 billion, or around 10.7 per cent. HFO reportedly accounted for another 9.5 per cent of the value of generation, while RLNG contributed approximately 26 per cent.
Industry representatives also questioned the inclusion of more than Rs16 billion in prior-year adjustments within the overall FCA claim of Rs32.70 billion.
They argued that such a substantial amount appeared to have been incorporated under a previous-period actualisation component without receiving the same level of scrutiny as the current month’s fuel costs.
According to the industry, adjustments relating to previous periods should be explained separately, with a detailed reconciliation of the amounts originally claimed, the actual costs subsequently established and the reasons for any differences.
They maintained that consumers should be provided with a transparent breakdown of all components before the regulator determines whether they should be recovered through electricity bills.
The industrialists also called for greater transparency in the calculation of fuel charges, arguing that public hearings would serve their purpose only if the underlying data and major cost components were open to detailed examination.
Another concern raised by industrial consumers was the impact of government taxes and levies on diesel and HFO used for electricity generation.
Industry representatives argued that levies imposed on fuels ultimately increased generation costs and were indirectly recovered from electricity consumers through higher tariffs.
They urged the government to consider using revenue collected through levies on fuels consumed by power plants to reduce electricity tariffs, recalling that a similar approach had previously been adopted by the government led by Prime Minister Shehbaz Sharif.
The industrialists argued that this would help lower the cost of electricity without requiring consumers to bear the full impact of taxes and levies incorporated into fuel prices.
They also linked the issue to the tax liabilities of power distribution companies, arguing that amounts passed through to consumers ultimately increase the financial burden on businesses and households while generating revenue for the government.
Aamir Sheikh further said that consumers were still awaiting an adjustment in electricity tariffs following the reduction in capacity charges negotiated with RLNG terminal operators.
They argued that any savings resulting from the revised arrangements should be quantified and credited to consumers through the appropriate tariff mechanism.
The industrialists maintained that such relief should not remain outside the FCA and other adjustment calculations, particularly when businesses were already facing pressure from expensive fuels, capacity payments and taxes.
They called for NEPRA and the relevant government entities to clarify the amount of savings generated through the revised terminal arrangements, the period to which those savings related and the mechanism through which the benefits would be passed on to electricity consumers.
CPPA-G CEO Rihan Akhtar observed during the hearing that earlier reductions in industrial electricity tariffs had not translated into a corresponding improvement in exports.
Industry representatives disputed that assessment, arguing that Pakistan’s exports had reached record levels when industrial electricity tariffs were reduced to around seven to nine US cents
Meanwhile, PPMC CFO Naveed Qaiser said the government had reduced power-sector circular debt from Rs2.3 trillion to Rs1.6 trillion through various measures.
He urged the business community to raise its voice against levies on fuels, arguing that a reduction in taxes could help lower electricity tariffs.
Qaiser said the government was working to bring industrial electricity tariffs closer to levels prevailing in regional countries, adding that discussions were under way at various forums. He stated that domestic and industrial tariffs had already been reduced by Rs10 and Rs18 per unit, respectively.
FPCCI representative Rehan Javed, meanwhile, questioned the credibility of CPPA-G’s figures and urged NEPRA to reject the proposed FCA. He also raised concerns over the industrial incremental consumption package, coal procurement by PQEPC and what he described as excessive taxation.
Javed cited figures suggesting that Rs2.711 trillion had been lost during FY2015-16 to FY2025-26, comprising Rs1.355 trillion attributed to inefficiencies and Rs1.3556 trillion to under-recoveries. These figures were presented by the industry representative and were not independently verified during the proceedings described.
Responding to the concerns, CPPA-G CEO Rihan Akhtar rejected the impression that the agency was permitting coal purchases at inflated prices and passing additional costs on to consumers.
He also questioned the assumption that reductions in industrial electricity tariffs would necessarily produce a corresponding increase in exports. Ends