Solar Boom Could Cost Pakistani Consumers Rs. 34 Billion Extra

A proposed tariff increase could leave Pakistani consumers shelling out an extra Rs. 34 billion over the next two quarters, with costs rising to Rs. 1.34 per unit, according to the National Electric Power Regulatory Authority (NEPRA). The adjustment, which rose from an initial estimate of Rs. 23.03 billion to Rs. 33.78 billion, is attributed to lower electricity consumption driving up capacity-related costs.

Capacity charges account for Rs. 46.28 billion of the increase, while variable operation and maintenance costs add another Rs. 4.94 billion. These are partially offset by negative adjustments in Use of System Charges and Market Operator Fee, as well as a Rs. 21.18 billion package for increased consumption. Transmission and distribution losses, plus unrecovered costs from Small and Captive Power Producers, also contribute to the total.

Industrial representatives at the NEPRA hearing voiced concerns that another cost hike could burden businesses, making Pakistani industries less competitive. They noted a 5% reduction in electricity consumption, partly due to the increasing adoption of solar power. Peshawar Electric Power Company officials attributed part of the decline to solar power usage.

NEPRA member Maqsood Anwar Khan speculated that load shedding might also be affecting electricity sales. Pesco officials confirmed ongoing load shedding, even in areas with reliable payment records. Tanveer Barry, speaking for the Karachi Chamber of Commerce and Industry, questioned why consumers should bear the burden of higher capacity payments while power companies continue load shedding. Industrial representatives requested NEPRA to reconsider the proposed increase.