ISLAMABAD: The electricity consumers across the country are expected to get an unusual relief of around Rs1.75 per unit over the next three months (June to August), mainly due to Rs64 billion in savings on account of lower capacity payments made to power producers during the first quarter (January-March) of the current year.
Under the annual tariff rebasing mechanism, the government has revised the tariff-setting framework to align with the calendar year starting Jan 1, 2026, replacing the previous practice of fiscal-year adjustments.
The National Electric Power Regulatory Authority (Nepra) has called a public hearing on May 19 at the request of ex-Wapda distribution companies (Discos) to seek approval for a Rs63.94bn refund to consumers under the quarterly tariff adjustment (QTA) mechanism. The proposed refund amounts to a negative QTA of about Rs1.75 per unit over three billing months.
Consumers are currently paying a positive QTA of around 42 paise per unit due to higher costs amounting to Rs10.8 bn in the fourth quarter (October-December 2025), which will expire by the end of next month.
It would then be replaced by the negative QTA for the following three months, resulting in a net reduction of about Rs2.15 per unit in electricity bills. However, this relief could partially be diluted in case of higher monthly fuel cost adjustments due to expensive fuel imports.
The Discos sought adjustments on account of capacity charges, transmission charges and market operator fee, along with the impact of the incremental consumption package announced by the government for industrial and agricultural consumers for three years, besides the effect of transmission and distribution losses on monthly fuel costs and variable operation and maintenance charges for the first quarter of calendar year 2026.
The total negative impact of capacity charges for the quarter amounted to around Rs37bn. However, these savings were partially offset by Rs4.876bn in higher operation and maintenance costs and Rs2.8bn related to system losses reflected in monthly fuel cost adjustments.
Additional savings also came from use-of-system charges and market operator fees amounting to Rs11.24bn, and about Rs23.5bn under the incremental consumption package, bringing the net consumer relief to Rs63.94bn.
All 11 Discos sought a negative QTA adjustment for the first quarter. Faisalabad Electric Supply Company (Fesco) topped the list with proposed savings of Rs10.45bn, followed by Hyderabad with Rs10.14bn, Peshawar with Rs8.63bn, and Lahore with Rs7.9bn.
Islamabad and Multan electric power companies sought refunds of Rs6.37bn and Rs6.33bn, respectively, followed by Gujranwala with Rs5.1bn and Tribal Electric Supply Company with Rs3bn. Sukkur and Quetta electric supply companies proposed refunds of Rs2.9bn and Rs2.6bn, respectively, while Hazara Electric sought a refund of Rs495 million for consumers.
Once approved, the QTA would apply to consumers of all Discos as well as K-Electric. However, quarterly tariff adjustments, debt service surcharge (DSS) and negative fuel cost adjustments are not applicable to eligible consumers availing the special tariff package announced by the government on incremental consumption.
Under the tariff mechanism, changes in fuel costs are passed on to consumers monthly through an automatic adjustment mechanism, while quarterly tariff adjustments relating to power purchase prices, capacity charges, variable operation and maintenance costs, use-of-system charges, and the impact of transmission and distribution losses are built into the base tariff by the federal government.
Published in Dawn, May 7th, 2026
