Nepra Sets Electricity Wheeling Charges for Pakistan’s Competitive Power Market
The National Electric Power Regulatory Authority (Nepra) has notified electricity use-of-system charges ranging from Rs6.23 to Rs19.62 per unit for bulk power consumers participating in Pakistan’s competitive electricity market.
The decision applies to consumers of all power distribution companies, including K-Electric, and is expected to help move forward with the planned competitive wholesale electricity market.
Under the Competitive Trading Bilateral Contract Market (CTBCM), eligible consumers will be able to purchase electricity from private suppliers and use the national grid to transport power to their premises.
The notified charges cover transmission and distribution costs, fixed grid charges and cross-subsidies. These amounts will be paid in addition to the electricity price agreed between consumers and private suppliers.
Charges Vary by Consumer Category
According to Nepra’s notification, industrial consumers in category B-3 will pay Rs6.23 per unit, while B-4 consumers will face charges of Rs9.09 per unit under the competitive wheeling auction.
For C-2 and C-3 single-point distribution consumers, the notified charges range from Rs14.95 to Rs19.62 per unit. General supply consumers in categories A-2 and A-3 will pay Rs19.14 per unit, while agricultural consumers will be charged Rs6.72 per unit.
Consumers who do not participate in the competitive wheeling auction will face higher use-of-system charges, ranging from Rs19.17 to Rs32.56 per unit, depending on their category.
Under these rates, B-3 industrial consumers will pay Rs19.17 per unit and B-4 consumers Rs25.45 per unit. The charges for C-2 and C-3 consumers have been set at Rs31.30 and Rs32.56 per unit, respectively.
A-2 and A-3 consumers will pay Rs32.08 per unit, while agricultural consumers will face a charge of Rs19.66 per unit.
A separate fixed grid charge of Rs1 per kilowatt per month, calculated according to the consumer’s sanctioned load, will apply to both participating and non-participating consumers.
First 400MW Electricity Auction Expected Soon
The notification is expected to remove a major hurdle in launching the competitive electricity market, as the first auction had been delayed because the wheeling charges were yet to be finalised.
The Independent System and Market Operator (ISMO) is expected to conduct the first auction for 400 megawatts (MW) of electricity within the next couple of months. The government has allocated a total of 800MW for auction in two phases.
Under the approved framework, electricity generation capacity will be offered through competitive auctions for five years. The volume available for auction could increase gradually after the initial trial, subject to government approval.
The first auction will follow a process recently approved by Nepra. ISMO is expected to announce the auction schedule and detailed procedures.
Bid values will have no upper or lower limits and will remain fixed for one year, according to the framework.
Uniform Charges Across Distribution Companies
Nepra finalised the charges after reviewing input from the Power Division, ISMO, K-Electric and bulk power consumers. The review covered the calculation and settlement of wheeling charges, differences between distribution companies, cross-subsidies and transmission and distribution losses.
The regulator said charges for consumers using open access should remain consistent with those applicable to comparable customers supplied by their regular electricity providers.
Nepra also set a uniform transmission and distribution loss factor of 8.04 per cent for consumers connected at the 11-kilovolt level. For consumers connected at 132kV, the approved loss factor is 1.51 per cent.
Under government directions, the cost of differences between distribution companies will not fall solely on consumers using the competitive wheeling system. Any additional amount required to cover these differences will apply to all relevant consumers, including open-access users and customers supplied by their regular providers.
The government had previously approved guidelines for competitive auctions covering 800MW of electricity, alongside plans to improve integrated energy planning across the country.
The notification of uniform wheeling charges for distribution companies and K-Electric is an important step towards enabling eligible consumers to purchase electricity from alternative suppliers through the planned competitive market.
