PD-private sector ‘alliance’ takes on Ogra
MUSHTAQ GHUMMAN
ISLAMABAD: The Power Division and the private sector on Thursday appeared to have formed an undeclared alliance against the Oil and Gas Regulatory Authority (Ogra) over the recovery of RLNG arrears from 2015 to 2024 — a move that, if enforced, would impact both industry and power plants, with the ultimate burden shifting to electricity consumers.
The joint position was evident during a public hearing at the National Electric Power Regulatory Authority (NEPRA) regarding uniform Fuel Charges Adjustment (FCA) for July 2025 across the country, including K-Electric’s service area. The Central Power Purchasing Agency (CPPA-G) had sought a negative adjustment of Rs 1.69 per unit. Since the current FCA of Rs 0.78 per unit will be replaced, consumers are expected to receive refunds of Rs 12.5 billion at the rate of Rs 0.91 per unit.
The hearing, chaired virtually by NEPRA Chairman Waseem Mukhtar, was conducted by Member (Technical) Rafique Ahmad Shaikh, Member (Law) Amina Ahmed, and Member (Development) Maqsood Anwar Khan.
Electricity generation in July 2025 stood at 14,123 GWh, down 5 percent from 14,880 GWh in July 2024. Hydropower output, however, increased by 6 percent to 5,668 GWh, accounting for 40.31 percent of total generation.
Key issues raised during the hearing included: (i) legitimacy of withholding Rs 10 billion in negative FCA of May and June 2025 meant for K-Electric consumers; (ii) applicability of uniform FCA to K-Electric without written approval of the Federal Cabinet; (iii) increase in KE’s supply from the national grid to 2,000 MW from 1,600 MW; and (iii) pending tariff determination for Cold Storages.
Textile exporter Aamir Sheikh warned that recovery of RLNG arrears from 2015–22, already billed to the power sector, could raise electricity tariffs by Rs 2–4 per unit, with arrears from 2022–25 also planned for billing. He said no one knows the actual RLNG rate, making it impossible for industry to plan, as RLNG contributes 20 percent of the energy mix.
“The industry implores NEPRA not to allow recovery of these arrears as they are illegal and cannot be charged retrospectively. OGRA did not even hold public hearings despite the Lahore High Court ruling,” he added.
He further criticized recent increases in domestic gas prices, calling them an additional burden on an already struggling industry. Sheikh praised NEPRA as a “far better regulator than OGRA,” a remark that drew smiles from NEPRA’s technical member.
CPPA-G CEO Rihan Akhtar acknowledged that revision of indigenous gas prices by OGRA has raised the cost of gas-fired generation. On RLNG arrears, he admitted industry concerns were “fair,” adding that CPPA-G itself opposed recovery of differences in provisional RLNG rates:
“There was never any mention of provisional rates in past bills. OGRA has now declared them provisional. CPPA-G has also taken up this issue,” he said.
Mehfooz Bhatti, Additional Secretary Power Division informed the ECC that the decision regarding passing on the financial benefit of PL on CPPs, will be ratified by the Cabinet, after which guidelines will be issued to NEPRA.
Karachi-based consumer advocate Rehan Jawed argued that Power Division cannot direct NEPRA to withhold K-Electric’s negative FCA or impose uniform FCA without Cabinet approval in writing. “Uniform FCA policy can only apply prospectively after Cabinet approval and NEPRA notification — not retrospectively for May and June 2025,” he stressed.
However, K-Electric CEO Moonis Alvi backed Power Division’s stance, saying uniform FCA would ultimately benefit consumers. He also won praise from NEPRA’s technical member for KE’s rehabilitation work during Karachi’s recent rains.
The KCCI’s representative, Tanveer Barry, questioned why FCA hearings for May and June 2025 had not been held for Karachi, where the adjustment amounts to nearly Rs 10/kWh. He urged NEPRA to ensure the full benefit reaches KE consumers. Barry also pointed to massive inefficiencies in the power sector, citing the Auditor General’s report that Rs 481 billion remained unrecovered from Discos in 2023–24, while Rs 4.8 trillion in financial and operational irregularities were detected in 2024–25.
Industrialist Arif Bilwani criticized outdated rules from 2005 that continue to govern capital investment benchmarks for Discos and KE despite hundreds of billions of rupees spent on upgrades. “Why should industry still suffer substandard supply after 20 years?” he asked, adding that poor quality has discouraged captive power units from shifting to the grid.
He further questioned why industries must install costly 132 kV grids for loads of 20–50 MW when 33 kV or 66 kV systems would suffice, calling the requirement “an unnecessary burden.”
Bilwani also highlighted severe equipment damage caused by voltage and frequency fluctuations, noting that while industries are penalized for failing to maintain power factor above 90 percent, no such penalties exist for Discos failing to ensure quality supply. On tariff determination for cold storages, NEPRA’s technical member assured Farooki that a decision would be announced by September 15, 2025, noting it would have implications for other consumers and required Power Division’s input.
The NEPRA also ordered inquiry into fire incident which damaged equipment meant for Lahore North Transmission Line due to which the project will further be delayed by a few months.
