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The government has lodged a plea with NEPRA to raise the power purchase price (PPP) by as much as Rs27.11 per unit, a substantial escalation from the current Rs20.60 per unit, signifying a significant jump of Rs6.51 per unit in electricity generation expenses to set the base tariff for the fiscal year 2024-25.

NEPRA is set to establish the base tariff for the upcoming financial year commencing July 1, influenced by IMF directives. The ongoing visit of the IMF delegation to Pakistan, amid negotiations with government officials for a loan program worth $6-8 billion, has intensified speculation.

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Officials in the Energy Ministry anticipate the base tariff for 2024-25 could rise to Rs36.28 per unit, up from the current Rs29.78, which had stood at Rs24.82 per unit in 2022-23 after factoring in distribution margins and prior year adjustments. Moreover, peak-hour electricity rates for domestic consumers are expected to climb to Rs48.51 per unit, surpassing Rs42 per unit with the inclusion of DISCOs’ allowable losses of 11 percent, surcharges, taxes, and duties.

According to the CPPA submission, DISCOs are projected to procure 130.876 billion units of electricity at a cost of Rs3.589 trillion in the next fiscal year, assuming a PPP of Rs27.11 per unit, or Rs3.3 trillion at Rs25.03 per unit.

Capacity payments for the financial year 2024-25 are anticipated to soar to Rs2.278 trillion, largely attributed to the addition of 1,002 MW from three projects slated for 2024. The Sukhi Kinari Hydro Project (870 MW) is expected to commence operations on November 30, 2024, the Zorlu Solar Power project (100 MW) on October 11, 2024, and the Shahtaj Sugar Mill Limited (32 MW) on August 11, 2024. These capacity payments will translate to Rs17.42 per unit of electricity.

Presently, existing capacity payments amount to Rs1.9 trillion, equating to Rs14.09 per unit in electricity tariffs for end consumers.

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