ISLAMABAD/LAHORE: The National Electric Power Regulatory Authority has issued its determination on uniform use-of-system charges for open-access electricity consumers, removing the final regulatory obstacle to the launch of Pakistan’s Competitive Trading Bilateral Contract Market.
Under the decision, consumers who secure open access through a competitive wheeling auction will pay a standardised set of grid charges. Transmission, distribution and cross-subsidy components have been fixed separately for each consumer category.
For B-3 consumers, total grid charges have been set at Rs6.23 per unit. For B-4 consumers, the total variable grid charge is Rs9.09 per unit.
For C-3 consumers the total variable grid charge is Rs14.95 per unit; for C-2(a) consumers, Rs19.62 per unit; and for C-2(b) consumers, Rs17.74 per unit.
A-2(c) consumers will pay a total variable grid charge of Rs19.14 per unit and A-3 consumers Rs19.10 per unit. For D-2(b) consumers, the regulator has fixed the charge at Rs6.72 per unit.
The spread across categories — from Rs6.23 to Rs19.62 — is largely a function of the cross-subsidy element, which recovers from larger consumers the discount extended to protected domestic and agricultural users. That structural feature will determine which industries actually find open access economical.
Federal Minister for Energy Sardar Awais Ahmad Khan Leghari welcomed the determination, calling it an important milestone in the establishment of a competitive electricity market.
The minister said the setting of the use-of-system charge was the last significant regulatory step required for CTBCM, and that its determination had cleared the path for the CTBCM auction. A competitive market, he said, would move Pakistan beyond the traditional single-buyer model, allowing eligible industrial consumers to purchase electricity from suppliers of their choosing for the first time, on a bilateral basis.
Mr Leghari said the benefits would not be confined to industrial users. Competition in procurement would produce more efficient generation and better prices, improve the utilisation of existing power plants and reduce inefficiencies across the electricity value chain. The market, he added, would encourage the integration of renewable energy and battery storage, support better use of indigenous low-cost energy resources and help reduce dependence on expensive imported fuel.
He said NEPRA’s decision provided the regulatory framework necessary for direct access, and that the CTBCM auction would represent a significant structural change in Pakistan’s power market. The Power Division, he said, was committed to implementing the competitive market transparently and effectively.
Since the unbundling of WAPDA in the late 1990s, Pakistan’s power sector has operated on a single-buyer architecture: the Central Power Purchasing Agency contracts with generators, mostly on capacity-payment terms, and sells on to distribution companies, which hold territorial monopolies. Consumers have no choice of supplier.
That model is widely blamed for the sector’s two most intractable problems — the accumulation of capacity payments owed to plants that may not be dispatched, and circular debt. CTBCM, first approved in principle by NEPRA in 2020 and repeatedly delayed, is intended to introduce competition on the supply side by letting bulk consumers contract directly with generators while paying a regulated fee for use of the transmission and distribution network.
For Lahore, Faisalabad, Sialkot and Gujranwala — the province’s export-manufacturing spine — the practical question is arithmetic. A textile unit will only leave its DISCO if the delivered cost of contracted power plus the use-of-system charge undercuts the regulated tariff. Given that the cross-subsidy element is embedded in the wheeling charge, the saving for many categories may be narrower than the headline promise of “choice” suggests.
Industry bodies have consistently argued that cross-subsidies should be shifted to the budget as a targeted subsidy rather than loaded onto commercial tariffs. That debate is not resolved by this determination, but the publication of category-wise numbers at least allows firms to model the decision for the first time.
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