Wapda seeks 90pc hike in revenue requirement

ISLAMABAD: The Water and Power Development Authority (Wapda) has filed a tariff petition for the financial year 2025-26, seeking over 90 percent increase in its total revenue requirement, including hydel levies, to Rs 364.872 billion from Rs 190.909 billion determined by Nepra for 2022-23.

According to the tariff petition, which will be taken up for public hearing by the National Electric Power Regulatory Authority (Nepra) on September 11, 2025, Wapda has proposed a substantial rise in multiple cost heads.

The authority has sought a 66.7 percent increase in operation and maintenance (O&M) expenses to Rs 39.792 billion in FY 2025-26 from Rs 23.749 billion in 2022-23, and a 16.6 percent increase in depreciation to Rs 8.668 billion from Rs 7.494 billion over the same period.

For return on investment (RoI), Wapda has requested Rs 32.011 billion in FY 2025-26 for power stations, up 9 percent from Rs 29.453 billion, while ROI on power projects is projected at Rs 99.642 billion— an unprecedented 172 percent jump from Rs 36.771 billion in 2022-23.

The petition also projects other income at Rs 772 million in FY 2025-26 compared to Rs 535 million in 2022-23. For the aforementioned heads, Wapda has sought Rs 179.141 billion against Rs 96.933 billion earlier, marking an 85 percent rise.

Although the Authority has not proposed any amount on account of regulatory gap for FY 2025-26, it has included earlier claims: Rs 22.352 billion for 2022-23, Rs 56.038 billion for 2023-24, and Rs 60.975 billion for 2024-25. Overall, Wapda’s revenue requirement request shows an increase of 165.5 percent— from Rs 119.962 billion in 2022-23 to Rs 318.507 billion in 2025-26.

For Net Hydel Profit (NHP) payments, Wapda has sought Rs 29.526 billion for Khyber Pakhtunkhwa (down from Rs 30.027 billion in 2022-23), Rs 11.969 billion for Punjab (up from Rs 11.867 billion), Rs 5.086 billion in water usage charges (WUC) for Azad Jammu & Kashmir (up from Rs 4.222 billion), and Rs 158 million for IRSA (slightly up from Rs 156 million).

Nepra in its tariff determination of Wapda for FY 2022-23, notified interim Regular NHP rates for provinces Khyber Pakhtunkhwa and Punjab at Rs.1.548/ kWh and Rs.1.474/ kWh, respectively, subject to adjustment if any in the light of Council of Common Interests (CCI) decision. In the instant Tariff Modification Petition, NHP rates for FY 2025-26 have been proposed same as last determined and notified by Nepra pending decision by CCI on NHP indexation.

Wapda’s cumulative revenue requirement, including hydel levies, now stands at Rs 364.872 billion for FY 2025-26, compared to Rs 190.909 billion in 2022-23. Its estimated net generation is 31,563 GWh in FY 2025-26 versus 31,286 GWh in 2022-23.

Nepra in its tariff determination of Wapda for FY 2022-23, notified WUC rate for AJ&K at Rs.1.10/kWh along with future indexation in line with NHP indexation. However, pending decision by CCI on NHP indexation WUC rate has been proposed without change for FY 2025-26 in the Tariff Modification Petition (TMP).

Under Rules 6 and 7 of the Nepra Tariff Standards & Procedures Rules, 1998, any interested party may file an intervention request or submit comments in response to the petition. Nepra may permit participation and consider such submissions in its final determination.

The RAB for development projects has been calculated on Average Capital Works in Progress (CWIP) balances, excluding IDC and grants. While allowing “Provision for Future Development”, Nepra considers debt equity ratio of 80 percent: 20 percent for power projects as benchmark (fixed in FY 2015-16) instead of actual debt equity ratio. In compliance debt equity ratio for power projects has been claimed as 80 percent: 20 percent in the current tariff petition.—MUSHTAQ GHUMMAN