Nepra warns of Rs1.5 per unit burden on consumers due to power plant inefficiencies

ISLAMABAD: The National Electric Power Regulatory Authority (Nepra) has raised alarms over the additional burden of over Rs1.5 per unit on electricity consumers, attributed to inefficiencies in select generation and transmission projects during the first eight months (July to February) of the current fiscal year.

According to Dawn, Rafique A. Shaikh, Nepra’s technical member from Sindh, has urged the government and relevant power companies to implement immediate corrective measures, specifically targeting the 4,000MW Lahore-Matiari Transmission Line, the 969MW Neelum-Jhelum Hydropower Plant, and the 747MW Guddu Power Plant.

He noted that thermal power plants operated at approximately 24 percent capacity in February 2025, while the high-voltage direct current (HVDC) system functioned at merely 23 percent. This underutilization has detrimental effects on consumers.

In November, he had alerted the government about the inadequate capacity utilisation of these facilities, pointing out the average utilization of the HVDC system was only 46 percent, while consumers continued to bear costs based on a 100 percent capacity factor. This figure dropped to 24 percent in February.

Despite the low utilization rates, consumers are still charged for the full transmission capacity. Meanwhile, more economical coal-based plants in the southern regions remain underutilized or operate at minimal levels, while expensive plants in the north are activated to maintain grid stability, further increasing costs for consumers.

According to him,  the Guddu plant, operating in open-cycle mode, incurred a financial loss of Rs600 million in February, leading to cumulative losses of Rs5.7 billion for FY25. Reduced output from the 747MW Guddu plant has compelled reliance on pricier fuel sources, resulting in a financial shortfall of Rs22 billion for February alone, with total losses since the outage reaching Rs107 billion.

He also drew attention to the ongoing closure of the Neelum-Jhelum power project for months, which further affected the national average tariff. The outage of the 969MW Neelum-Jhelum Hydropower Plant led to an additional financial loss of Rs0.8 billion in February 2025, bringing the cumulative loss for FY25 to Rs23.7 billion.

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Shaikh noted that system constraints and contractual obligations alone caused losses of Rs1.98 billion in February, contributing to a total loss of Rs11.69 billion over the first eight months of FY25, and stressed the urgent need for corrective actions to optimize asset utilization, cut costs, improve reliability, and reduce financial losses.

The slow rehabilitation of the Guddu and Neelum-Jhelum plants continues to be a concern, with urgent repairs and restorations required for these facilities.