ISLAMABAD: Electricity tariffs for consumers of all distribution companies (Discos), including K-Electric, are likely to decrease by Rs1.51 per unit for three months due to lower capacity charges, driven by reduced interest and exchange rates and revisions in power purchase contracts with both public and independent power producers (IPPs).

The National Electric Power Regulatory Authority (Nepra) has scheduled a public hearing for Aug 4 to consider the federal government`s request for a Quarterly Tariff Adjustment (QTA), which seeks to pass on a financial relief of Rs53.4 billion to electricity consumers nationwide for the fourth quarter of 2024-25.

The petition, filed by the Central Power Purchasing Agency (CPPA) on behalf of the Power Division, requests a refund of Rs53.393bn reflecting cost savings accrued during the April-June quarter.

While total savings on capacity charges were estimated at Rs53.7bn across ten public sector Discos, the net relief was trimmed slightly due to increases in operations and maintenance (O&M) costs, service charges, and market operation fees.

All Discos posted a decline in capacity charges during the quarter, except Quetta Electric, whose charges rose by Rs3.057bn. Although K-Electric did not contribute to the savings, its consumers will also benefit from the adjustment under the government`s uniform national tariff policy.

Faisalabad Electric posted the largest savings at Rs15.026bn, followed by Lahore Electric with Rs12.636bn and Multan Electric at Rs8.48bn. Hyderabad, Gujranwala, and Peshawar Electric recorded reductions of Rs6.63bn, Rs6.11bn, and Rs3.3bn, respectively. Tribal Electric saved Rs2.88bn, Islamabad Electric Rs1.04bn, and Sukkur Electric Rs653 million.

The CPPA also sought an increase in variable O&M costs by Rs182 million and an additional Rs804 million under Use of System Charges (UoSC) and Market Operator Fees (MOP).

Meanwhile, Rs662 million in further savings was recorded from reduced transmission and distribution (T&D) losses under monthly fuel cost adjustments.

Under the current tariff structure, fuel costs are adjusted monthly through an automatic mechanism.

However, quarterly adjustments which account for fluctuations in power purchase prices, capacity payments, O&M costs, UoSC, and T&D losses are incorporated into the base tariff by the federal government.-Khaleeg Kiani