Pakistan’s power regulator announces reduction in electricity rates

The National Electric Power Regulatory Authority (NEPRA) on Friday approved a relief of PKR 3.02 per kilowatt-hour for Karachi Electric (KE) customers under the Fuel Charges Adjustment (FCA) mechanism for January 2025. The reduction will reflect in consumer electricity bills for April 2025.

In a move aimed at shielding consumers from future financial burdens, NEPRA provisionally retained PKR 2 billion from the January FCA. This amount accounts for adjustments tied to partial load operations, open cycle inefficiencies, degradation curves, and start-up costs, as outlined in the generation tariff decision effective from July 2023. The retained sum will offset pending claims by KE.

Fuel Charges Adjustments are a monthly mechanism that adjusts electricity rates based on fluctuations in global fuel prices and changes in the generation mix. While these adjustments sometimes lead to increased bills, customers benefit from reduced rates during periods of lower global fuel costs. NEPRA oversees and approves these adjustments, which are subsequently notified by the federal government.

The January FCA relief will apply to all consumer categories except lifeline consumers, domestic protected consumers, prepaid electricity users, and Electric Vehicle Charging Stations (EVCS).