Nepra cuts power purchase price to Rs25.98 per unit for FY26

• Nepra's latest move likely to alleviate pressure on electricity prices.
• PPP for ex-Wapda Distribution Companies stands at Rs3.066tn.
• New PPP is Rs1.02 per unit less than FY25's Rs27 per unit average.
  

ISLAMABAD: The National Electric Power Regulatory Authority (Nepra) has reduced the national average Power Purchase Price (PPP) to Rs25.98 per unit for the upcoming fiscal year 2025-26. 

This marks a notable decrease of 3.77%, or Rs1.02 per unit, from the current Rs27 per unit, that is likely to alleviate pressure on electricity prices.

According to Nepra's latest determination, the total national Power Purchase Price for FY26 has been set at Rs3.342 trillion. 

For the ex-Wapda Distribution Companies (XWDiscos), the PPP specifically stands at Rs3.066 trillion, translating to Rs26.34 per unit. The calculation notably excludes K-Electric's share.

Of the total projected PPP for XWdiscos, Rs1.125 trillion is allocated to fuel and variable operation and management (O and M) costs, while a hefty Rs1.941 trillion — or 63% — is earmarked for capacity charges, including NTDC, Pak Matiari-Lahore Transmission Company (Pvt) Ltd (PMLTC) wheeling costs, and CPPA-G’s MoF. 

Capacity charges alone are estimated at Rs6.484 per unit per month, based on an average monthly Maximum Demand Indicator (MDI) of 24,943 MW.

On a per unit basis, energy charges for XWdiscos are calculated at Rs9.67 per unit, while capacity charges make up Rs16.67 per unit, resulting in a total of Rs26.34 per unit before transmission and distribution (T and D) losses.

The new PPP is Rs1.02 per unit less than the ongoing fiscal’s Rs27 per unit average, when the total power purchase cost stood at Rs3.534 trillion.

The Central Power Purchasing Agency (CPPA-G), in its petition to NEPRA, outlined seven PPP scenarios for FY26 based on varying assumptions of demand growth (3–5%), exchange rates (Rs280–300 per USD), and hydrological flows. 

Proposed fuel charges range from Rs8.16 per unit to Rs9.19 per unit, while capacity payments under different scenarios are projected between Rs16.04 per unit and Rs16.45 per unit — continuing the trend where capacity charges dominate the power purchase cost.

By comparison, for FY24, capacity charges stood at Rs16.22 per unit while energy charges were just Rs6.73 per unit. The total PPP for 2023-24 was Rs22.95 per unit, highlighting a continued upward trend in fixed power costs.