ISLAMABAD: The National Electric Power Regulatory Authority (NEPRA) has notified use-of-system charges ranging from Rs6.23 to Rs19.62 per unit for bulk electricity consumers participating in Pakistan’s competitive power trading market.
The charges will apply to eligible consumers of all distribution companies, including K-Electric, under the Competitive Trading Bilateral Contract Market (CTBCM). The mechanism allows eligible consumers to purchase electricity from private suppliers while using the national grid to transport power.
The notified charges cover transmission and distribution costs, a fixed grid charge and cross-subsidies. They will be payable in addition to the electricity supply price agreed between private suppliers and consumers.
Charges Vary by Consumer Category
Under the upcoming 400-megawatt auction, industrial consumers in the B-3 category will pay Rs6.23 per unit, while B-4 consumers will pay Rs9.09 per unit.
For C-3 and C-2 single-point distribution consumers, the notified charges range from Rs14.95 to Rs19.62 per unit. General supply consumers in the A-2 and A-3 categories will pay Rs19.14 per unit, while agricultural consumers will pay Rs6.72 per unit.
The rates for bulk consumers who do not participate in the competitive wheeling auction will be considerably higher.
B-3 industrial consumers in this category will pay Rs19.17 per unit, while B-4 consumers will pay Rs25.45. The charges for C-2 and C-3 consumers stand at Rs31.30 and Rs32.56 per unit, respectively.
A-2 and A-3 consumers will pay Rs32.08 per unit, while agricultural consumers will face a charge of Rs19.66 per unit.
A fixed grid charge of Rs1 per kilowatt per month, calculated on the basis of sanctioned load, will apply to both categories regardless of auction participation.
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400MW Auction Expected in First Phase
The notification is intended to clear a key hurdle to launching Pakistan’s competitive wholesale electricity market.
The commercial market operation date for CTBCM had been declared as January 22, 2026, with the first auction initially planned for June. However, the auction was delayed because NEPRA had not finalised and notified the use-of-system charges.
The Independent System and Market Operator (ISMO) is expected to conduct the first auction for 400MW of electricity in the coming months. The federal government has allocated a total of 800MW for competitive auctions in two phases.
Under the approved framework, generation capacity will be sold through competitive auctions for five years. The allocation could increase gradually after the initial trial, subject to government approval.
ISMO is expected to announce the auction calendar and detailed procedures. Bid values will remain fixed for one year, with no upper or lower limit specified under the framework described in the report.
NEPRA Sets Uniform Charges and Loss Factors
NEPRA forwarded its determination to the federal government after consulting the Power Division, ISMO, K-Electric and bulk power consumers.
The discussions covered the calculation and settlement of charges, differences among distribution companies, cross-subsidies and transmission and distribution losses.
Under government directives, consumers participating in the wheeling market will not bear the entire impact of differences between distribution companies. NEPRA has also circulated a draft mechanism to settle those differences among the relevant stakeholders.
The regulator said charges for open-access consumers should remain equal to those paid by comparable consumers supplied by their designated suppliers of last resort.
Based on the distribution companies’ transmission and distribution losses, NEPRA set a uniform loss factor of 8.04 per cent for consumers connected at the 11-kilovolt level. For consumers connected at 132kV, it approved a uniform loss factor of 1.51 per cent, as proposed by the Power Division.
NEPRA also ruled that any additional amount needed to cover differences among distribution companies and K-Electric would apply to all consumers, including those using the competitive market and those supplied by suppliers of last resort.
Competitive Market Aims to Expand Consumer Choice
The federal government has approved framework guidelines for the 800MW competitive wheeling auction as part of its broader effort to move towards integrated energy planning.
The market is intended to allow eligible bulk consumers to negotiate electricity supply contracts directly with private-sector generators while paying regulated charges for access to the grid.
More than 3,000 bulk electricity consumers operate across Pakistan, according to the report. The new framework could give eligible businesses an alternative to purchasing electricity solely through their existing distribution companies.
The launch will depend on ISMO finalising the auction schedule and procedures, alongside implementation of the notified charges and the mechanism for settling differences among power companies.
