Nepra Clears Wheeling Charges, Unblocking Pakistan’s Competitive Power Market

Nepra notifies grid charges

The National Electric Power Regulatory Authority has notified uniform Nepra use of system charges for bulk power consumers, removing the last major regulatory hurdle to the launch of Pakistan’s competitive electricity market.

Under the decision, bulk power consumers taking part in the competitive wheeling auction will pay use-of-system charges of Rs6.23 to Rs19.62 per unit, depending on their category. The rates apply to all distribution companies, including K-Electric.

The charges cover transmission and distribution costs, a fixed grid charge and the cross-subsidy component. They will be paid on top of the electricity supply price, including generation cost, agreed bilaterally between the consumer and the private supplier.

Nepra use of system charges by category

Nepra has fixed the charges separately for each consumer category under the Competitive Trading Bilateral Contract Market (CTBCM):

Consumers who stay out of the competitive wheeling auction will face significantly higher charges, ranging from Rs19.17 to Rs32.56 per unit. A fixed grid charge of Rs1 per kilowatt per month, based on sanctioned load, applies to both groups.

Nepra also set uniform loss factors of 8.04 per cent at the 11kV level and 1.51 per cent at the 132kV level, rejecting the government’s proposed 8.42 per cent figure for 11kV connections. There are currently more than 3,000 bulk power consumers in the country.

Why this clears the way for the power market

The determination was the final regulatory step needed before the first 400MW competitive auction under the CTBCM framework. The commercial operation date for the market was declared as January 22, 2026, but the auction, originally planned for June, could not proceed until the use-of-system charges were determined and notified.

Federal Minister for Energy Sardar Awais Ahmad Khan Leghari welcomed the decision, calling it an important milestone in building a competitive electricity market. He said the market would move Pakistan beyond the traditional single-buyer model, allowing eligible industrial consumers to buy electricity from the supplier of their choice on a bilateral basis for the first time.

The spread of charges across categories largely reflects the cross-subsidy element, which recovers from larger consumers the discount extended to protected domestic and agricultural users. That structure will decide which industries actually find open access economical.

Nepra also rejected a proposal to recover certain additional charges only from wheeling consumers, ruling that such charges must apply equally to open-access users and those served by suppliers of last resort.

The decision lands as the power sector stays in the headlines: Lahore has seen nighttime outages spike even as rooftop solar eases daytime shortfalls (Lahore power outages spike at night as solar eases daytime shortfall), while fuel price revisions continue to feed into inflation (Petrol, diesel prices revised for October).

Frequently asked questions

What are Nepra’s new use-of-system charges?

Nepra has set uniform charges of Rs6.23 to Rs19.62 per unit for bulk power consumers participating in the competitive wheeling auction, varying by consumer category.

What is the CTBCM?

The Competitive Trading Bilateral Contract Market is Pakistan’s planned competitive wholesale electricity market, under which large consumers can buy power directly from private suppliers instead of their distribution company.

When will the first power auction take place?

The commercial operation date was declared as January 22, 2026. The first 400MW auction, originally planned for June, was delayed until the use-of-system charges were notified.

Do non-participating consumers pay more?

Yes. Bulk consumers who do not join the competitive auction face higher charges of Rs19.17 to Rs32.56 per unit, plus stranded-cost components.