Power regulator says revenue-based load-shedding illegal

ISLAMABAD: National Electric Power Regulatory Authority (Nepra) on Tuesday reiterated its stance that revenue-based load shedding in the country is illegal, despite concerns from the Power Planning and Monitoring Company (PPMC) that its abolition could add over Rs 500 billion to the circular debt. The issue—reportedly backed by the International Monetary Fund (IMF) and other international financial institutions—was discussed during a public hearing on the Fuel Charges Adjustment (FCA) for March 2026. The hearing was chaired by Nepra Chairman Waseem Mukhtar, along with Member (Tariff and Finance) Amina Ahmed and Member (Development) Maqsood Anwar Khan. While revenue-based load shedding is supported by the IMF, both Nepra and the Ministry of Law and Justice consider it illegal and a violation of citizens’ fundamental rights. Under this mechanism, outages are linked to recovery rates, with some areas facing up to 18 hours of load shedding. READ MORE: Govt starts power loadshedding to manage shortfall 4 However, the Power Division maintains that discontinuing such load management could increase circular debt by over Rs 500 billion. The circular debt stock stood at Rs 1.798 trillion as of March 31, 2026, and is projected to be reduced to Rs 1.224 trillion by June 30, 2026 with zero net increase in the flow. The Central Power Purchasing Agency-Guaranteed (CPPA-G) has sought a positive adjustment of Rs 0.27 per unit for March 2026, to be recovered in May 2026. This will replace the earlier positive FCA of Rs 1.42 per unit for February (recovered in April), resulting in a net negative impact of Rs 1.15 per unit for consumers. CPPA-G CEO Rihan Akhtar informed the Authority that electricity demand grew by 6.38 percent over the reference level and 6.31 percent compared to the same period last year. He noted that fuel cost increased by Rs 0.27 per unit, while a reduction of Rs 1.22 per unit in Capacity Power Purchase (CPP) at the CPPA-G pool level resulted in an overall net decrease of Rs 0.95 per unit in the total pool price. Currently, around 150 MMCFD gas is being supplied for power generation, up from 80 MMCFD, while an LNG cargo is expected to arrive in Karachi in the coming days. It was further revealed that energy consumption by captive consumers increased significantly, reflecting a notable year-on-year rise. Industry representatives from Lahore and Karachi appreciated the efforts of the Power Division and its attached entities in ensuring electricity supply while keeping tariffs manageable. The CPPA-G chief added that had K-Electric not been supplied electricity from the national grid, consumers would have faced an increase of Rs 1.06 per unit in FCA and Rs 2.72 per unit in CPP—translating into a total benefit of Rs 3.81 per unit for March 2026. Peak generation in March reached 18,551 MW, while the minimum generation dropped to 5,950 MW during the Eid-ul-Fitr holidays, when industrial net metering exports declined and the system came under stress. Copyright Business Recorder, 2026

Go to News Site