NEPRA Cuts Power Purchase Price to Rs 25.98/kWh for FY 2025–26, Promising Relief for Consumers
The National Electric Power Regulatory Authority (NEPRA) has approved a reduction in the national average Power Purchase Price (PPP) to Rs 25.98 per unit for the upcoming fiscal year 2025–26—a 3.77% decrease (Rs 1.02 per unit) from the current Rs 27.00/kWh
📉 Key Highlights:
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Total PPP for FY 26 is now Rs 3.342 trillion, while PPP for ex-Wapda distribution companies (XWDiscos) is Rs 3.066 trillion, equal to Rs 26.34/unit (excluding K-Electric) .
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For XWDiscos, fuel & variable O&M costs account for Rs 1.125 trillion, and capacity charges—covering NTDC, PMLTC wheeling, and CPPA‑G fees—make up 63% (Rs 1.941 trillion) of total PPP
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This translates to Rs 9.67/unit in energy charges and Rs 16.67/unit in capacity charges, before T&D losses.
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🔍 Scenario-Based Forecast:
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The CPPA‑G forecast offered seven scenarios based on demand growth, exchange rates (Rs 280–300/USD), and hydrological inflows.
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PPP estimates ranged from Rs 24.75 to Rs 26.70/unit, with fuel charges between Rs 8.16–9.19/unit and capacity charges from Rs 16.04–16.45/unit In FY 24, energy charges were Rs 6.73/unit and capacity charges Rs 16.22/unit, totaling Rs 22.95/kWh—highlighting the rise in fixed costs over time .
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⚡ What This Means:
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The Rs 1.02/unit PPP reduction is expected to ease tariff pressures for electricity consumers.
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However, capacity charges—which now form the majority of per-unit costs—remain a structural challenge.
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NEPRA’s decision follows CPPA‑G’s projections, though final savings depend on how many scenarios materialize
Bottom line: A modest but meaningful drop in power purchase costs—Rs 25.98/kWh—offers consumers some relief. Still, high fixed capacity charges continue to weigh heavily on electricity tariffs. For deeper savings, further reforms in cost structure are needed.
