Nepra clears key hurdle to competitive power market

Nepra clears key hurdle to competitive power market.

Key points

• Khaleeq Kiani Published September 8, 2026 Updated September 8, 2026 07: 26am.
• Approves uniform charges for all Discos; participating bulk power consumers to pay Rs6.23-Rs19.62 per unit Clears path for first 400MW open-access electricity auction.
• The UoSC for C-3 and C-2 single-point distribution consumers is set bet­ween Rs14.95 and Rs19.62 per unit.
• Non-participating B-3 and B-4 consumers will be charged Rs19.17 and Rs25.45 per unit, respectively.
• Based on the T&D losses of individual Discos, Nepra determined a uniform loss factor of 8.04 per cent at the 11kV level.

Khaleeq Kiani Published September 8, 2026 Updated September 8, 2026 07: 26am. Join our Whatsapp Channel. Add Dawn as a trusted source.

ISLAMABAD: The Nat­ional Electric Power Regu­latory Authority (Nepra) on Monday approved employ of system charges (UoSC) ranging from Rs6.23 to Rs19.62 per unit for bulk power consumers (BPCs) of all distribution businesses participating in the competitive electricity trading market.

Notably, the approval paves the way for open-access consumers to participate in an upcoming 400-megawatt auction. The consumers will pay the fee to the national grid to transport electricity from the source to the user. The charge includes transmission and distribution costs, fixed grid charges and cross-subsidies.

While a B-4 industrial consumer will pay Rs9.09 per unit, put together, a B-3 industrial consumer will be charged Rs6.23 per unit by the national grid. These charges will be along with the power supply rate, including generation costs, to be settled between private-sector power suppliers and BPCs. At present, there are more than 3, 000 BPCs nationwide.

For context, the UoSC for C-3 and C-2 single-point distribution consumers is set bet­ween Rs14.95 and Rs19.62 per unit. General supply consumers in the A-2 and A-3 categories will be charged Rs19.14 per unit.

Bulk power consumers who choose not to participate in the competitive wheeling auction will face significantly higher transport rates, ranging from Rs19.17 to Rs32.56 depending on their category. Non-participating B-3 and B-4 consumers will be charged Rs19.17 and Rs25.45 per unit, respectively. While A-2 and A-3 categories face a Rs32.08 charge, C-2 and C-3 consumers will pay Rs31.30 and Rs32.56.

Notably, a fixed grid charge of Rs1 per kilowatt per month, based on sanctioned load, will apply to all categories regardless of whether they participate in the competitive auction.

Meanwhile, the uniform rate announcement for all distribution firms, incl­uding K-Electric, is aimed at formally launching the competitive wholesale elec­t­ricity market. Under the first phase, the Inde­pendent System Oper­ation (ISMO), a new power division entity, will auction 400MW of electricity within the next few months. The administration has already allocated 800MW for auction in two phases.

Nepra issued the determination after reviewing submissions from the Power Division, ISMO, K-Electric and BPCs regarding the mechanism for determining and settling UoSC, including inter-Disco differentials, cross-subsidies and transmission and distribution (T&D) losses.

In practice, the Power Division had proposed that the impact of inter-DISCO differentials arising from uniform application of UoSC should not be imposed solely on wheeling consumers.

Nepra had earlier circulated a draft adjustment mechanism among relevant stakeholders for settling inter-Disco differentials. The regulator remarked the key principle was to ensure that UoSC applicable to open-access consumers remained equal to those applicable to similarly placed consumers of suppliers of last resort (SOLRs).

Based on the T&D losses of individual Discos, Nepra determined a uniform loss factor of 8.04 per cent at the 11kV level. As suggested by the Power Division, for consumers connected at 132kV, the regulator approved a uniform loss factor of 1.51pc.

Nepra ruled that the extra charge would apply to all consumers, inc­luding open-access consumers and SOLR consumers, to cover differences among distribution businesses and K-Electric while maintaining uniformity.

Notably, the federal administration had already appr­oved framework guidelines for the wheeling auction of 800MW of electricity through bilateral competitive trading and to move towards integrated energy planning throughout Pakistan.

Under the guidelines, 800MW of generation capacity will be sold through a competitive auction for five years. The volume will gradually growth after the initial trial phase, subject to administration approval. Nepra was tasked with determining uniform wheeling and grid charges for bulk power consumers.

ISMO will now formally conduct an auction for 400MW under a process approved by Nepra a few days ago. The entity will announce the auction calendar and detailed procedures within days, without imposing an upper or lower limit on bid values. It will remain fixed for one year.

While Nepra's approval of uniform wheeling charges was scheduled for January 2026, under timelines set under the IMF programme, approval of the auction guidelines was targeted for December. Both deadlines have already been met. Published in Dawn, September 8th, 2026.

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Khaleeq Kiani is an Islamabad-based reporter for Dawn, specializing in political economy, governance, business, finance, macroeconomics and energy. He can be discovered on X at @khaleeqkiani.

For now, nepra clears key hurdle to competitive power market remains the part of the story worth watching, and further updates are likely as more details are confirmed.