ISLAMABAD: The National Electric Power Regulatory Authority (Nepra) has reduced the national average Power Purchase Price (PPP) to Rs25.98 per unit for the fiscal year 2025-26, marking a 3.77% cut from the current Rs27 per unit. The reduction of Rs1.02 per unit aims to ease power cost pressures and help stabilise electricity tariffs.
According to Nepra’s determination, the total national PPP for FY26 has been set at Rs3.342 trillion. For ex-Wapda distribution companies (XWDiscos), the PPP stands at Rs3.066 trillion or Rs26.34 per unit, excluding K-Electric’s share.
A significant portion of the XWDiscos’ PPP — Rs1.941 trillion, or 63% — is allocated to capacity charges. This includes wheeling charges from NTDC and the Pak Matiari-Lahore Transmission Company, along with CPPA-G’s Ministry of Finance component. Capacity charges are projected at Rs6.484 per unit monthly, based on a peak demand of 24,943 MW.
Energy charges, on the other hand, are estimated at Rs9.67 per unit, making the total pre-distribution cost Rs26.34 per unit for FY26. The PPP for the current fiscal year stood at Rs3.534 trillion, which included higher energy and capacity costs.
The Central Power Purchasing Agency (CPPA-G), in its petition, presented seven PPP scenarios for FY26, based on variations in demand growth (3–5%), currency exchange rates (Rs280–300/USD), and water availability for hydropower generation. Fuel charges in these models ranged from Rs8.16 to Rs9.19 per unit, while capacity charges remained dominant at Rs16.04 to Rs16.45 per unit.
The cut in PPP is part of broader efforts to address the ballooning capacity payments, which continue to account for the lion’s share of power sector costs, limiting fiscal space and contributing to circular debt.
The revised PPP may help soften the blow for consumers in upcoming tariff adjustments, although actual relief will depend on fuel prices, T&D losses, and exchange rate fluctuations.
