Development for electricity consumers across Pakistan, nine state-run power distribution companies (DISCOs) have submitted formal petitions to the National Electric Power Regulatory Authority (NEPRA) to refund Rs. 51.49 billion for the January–March quarter of FY2024–25.
This unprecedented move follows a substantial decline in capacity payments, primarily due to the government’s cancellation of several contracts with Independent Power Producers (IPPs).
Breakdown of the Rs. 51.49 Billion Refund
The majority of the proposed refund—Rs. 47.12 billion—is attributed to a sharp decrease in capacity charges, marking a landmark shift in how power is procured and distributed across the national grid.
- Lower transmission and distribution (T&D) losses
- Recovery of fixed costs on incremental electricity units consumed
Islamabad Electric Supply Company (IESCO) stands out as the only distribution company not proposing a refund, instead requesting a surcharge of Rs. 1.76 billion due to increased capacity and system operation costs.
This adjustment brings the net refund down from an original Rs. 53.26 billion to Rs. 51.49 billion.
| DISCO | Refund Proposed (Rs. Billion) |
|---|---|
| MEPCO | 14.44 |
| LESCO | 7.82 |
| GEPCO | 6.48 |
| FESCO | 4.25 |
| TESCO | 4.03 |
| HESCO | 3.80 |
| SEPCO | 3.32 |
| PESCO | 2.54 |
| QESCO | 2.29 |
These figures demonstrate a collective effort to pass savings to electricity consumers, reflecting reforms in capacity procurement and power generation.
Drivers Behind the Refund
The Rs. 47.12 billion in reduced costs is a direct result of canceling high-cost IPP contracts. Historically, these contracts burdened the national exchequer due to their fixed capacity charges—payments made to IPPs regardless of electricity generation or usage.
The reduction of Rs. 2.05 billion in T&D losses indicates improvements in grid infrastructure, energy accounting, and loss prevention measures.
An additional Rs. 4.96 billion was recovered through DISCOs fixed cost adjustments related to incremental electricity consumption. This indicates that increased industrial and commercial energy usage helped stabilize the cost framework, benefiting overall affordability.
- System Usage and Market Operation Charges increased by Rs. 1.81 billion
- Operation & Maintenance (O&M) Expenses rose by Rs. 829 million
NEPRA has scheduled a public hearing for April 29, 2025, to evaluate the refund requests. If approved, this decision will directly lower electricity tariffs for consumers, extending a trend of downward adjustments in electricity pricing due to falling fuel and capacity costs.
