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Regulator Approves Standard Grid Charges for Bulk Power Buyers in Pakistan's New Electricity Market
ISLAMABAD: The National Electric Power Regulatory Authority (Nepra) has approved Uniform Use of System Charges (UoSC) for bulk power consumers (BPCs) and other open-access users, marking a significant step toward launching Pakistan's competitive wholesale electricity market while ensuring that consumers relying on different suppliers pay identical grid charges.
The regulator set uniform variable grid charges ranging from Rs6.23 to Rs19.62 per unit, depending on consumer category, for open-access users taking part in the competitive wheeling auction process. A fixed monthly grid charge of Re1 per kW, based on sanctioned load, will also apply.
The ruling, issued on September 7, 2026, followed a motion from the Federal Government and policy guidelines calling for consistent application of UoSC across all eleven former Wapda distribution companies (XWDISCOs), including K-Electric. Nepra said the measure was needed to create equal conditions for bulk consumers and open-access participants under the Competitive Trading Bilateral Contract Market (CTBCM).
The Power Division had submitted its motion on May 25, 2026, noting that the Commercial Market Operations Date had already been set for January 22, 2026, with the first market auction scheduled for June 2026. It argued that reforms toward market liberalization could not be postponed and that standardized UoSC and transmission and distribution (T&D) losses needed to be finalized promptly.
Under the new framework, uniform UoSC will apply to open-access consumers regardless of supplier. The charges include transmission fees, distribution fees, and cross-subsidy contributions, while stranded costs will be applied separately to consumers who choose open access without joining the competitive wheeling auction.
The approved variable grid charges for auction participants are: B-3 at Rs6.23/kWh, B-4 at Rs9.09/kWh, C-3 at Rs14.95/kWh, C-2(a) at Rs19.62/kWh, C-2(b) at Rs17.74/kWh, A-2(c) at Rs19.14/kWh, A-3 at Rs19.10/kWh, and D-2(b) at Rs6.72/kWh, along with the Rs1/kW/month fixed charge.
Nepra said these figures were derived using the same methodology applied for uniform consumer-end tariffs, rather than the approach initially suggested by the Power Division. For instance, the B-3 category's Rs6.23 total includes Rs1.60 in transmission charges, Rs1.99 in distribution charges, and Rs2.63 in cross-subsidy, while the B-4 total of Rs9.09 comprises Rs1.26 transmission, Rs2.78 distribution, and Rs5.05 cross-subsidy.
The cross-subsidy figures were based on a weighted average across all distribution companies, which Nepra said ensures consistent recovery and a level playing field between grid-connected and wheeling consumers within the same category.
Consumers who opt for open access without joining the wheeling auction will face additional stranded-cost charges—Rs12.94/kWh for those connected at 11kV and Rs16.35/kWh for those at 132kV/66kV. This brings total variable UoSC figures, including stranded costs, to: B-3 at Rs19.17/kWh, B-4 at Rs25.45/kWh, C-3 at Rs31.30/kWh, C-2(a) at Rs32.56/kWh, C-2(b) at Rs30.68/kWh, A-2(c) at Rs32.08/kWh, A-3 at Rs32.04/kWh, and D-2(b) at Rs19.66/kWh, with the same Re1/kW/month fixed charge applying.
The Federal Government had asked that these uniform charges also apply to K-Electric, suggesting any resulting financial shortfall be covered through an added charge rather than a government subsidy. The Power Division proposed placing this additional charge on wheeling consumers alone to preserve fiscal neutrality, and recommended amending Strategic Directive 88 of the National Electricity Plan 2023-27 to extend XWDISCO open-access charges to the privatized utility.
Nepra rejected this approach, ruling that charging only wheeling consumers would unfairly discriminate against them compared to consumers served by suppliers of last resort (SOLRs). The authority said this would violate uniformity requirements under the National Electricity Policy 2021 and National Electricity Plan 2023-27, and instead ruled that the additional charge must apply to all consumers—both open-access users and SOLR customers. Nepra noted that internationally, network use-of-system costs are typically treated as regulated, supplier-neutral charges applied uniformly across all network users, calling this uniformity essential for a functioning competitive electricity market.
The regulator also agreed that the Debt Servicing Surcharge (DSS) should apply to wheeling consumers just as it does to regulated consumers, citing Section 31(8) of the Nepra Act, which mandates suppliers to collect such surcharges when directed by the federal government. However, Nepra instructed that the government must keep the surcharge within limits set by that section.
On the issue of cost differences between distribution companies arising from uniform UoSC application, the Power Division had proposed recovering these differentials annually from open-access consumers through prior-period adjustments. Nepra rejected this, saying it would create disparities between open-access and SOLR consumers. Instead, the authority ruled that these differentials would be settled using the existing mechanism already in place for uniform consumer-end tariff adjustments, eliminating the need for a separate formula.
Nepra additionally approved standardized T&D loss factors for open-access consumers: 8.04 percent for those connected at 11kV—lower than the 8.42 percent proposed by the Power Division—and 1.51 percent for 132kV connections, matching the Power Division's proposal.
The regulator acknowledged that applying uniform losses could create energy surpluses in some distribution companies with lower actual losses and shortfalls in those with higher losses, since generators supplying bulk consumers would calculate injections based on the uniform loss factor. However, Nepra declined to approve an adjustment mechanism for these discrepancies at this stage, noting that a proposal from the Independent System and Market Operator (ISMO) had not been fully reviewed by stakeholders. The Power Division, XWDISCOs, K-Electric, and ISMO have been instructed to develop such a mechanism and present it during upcoming UoSC proceedings.
Nepra clarified that UoSC components are not permanently fixed and will undergo periodic adjustments similar to those applied to SOLR consumer tariffs. These charges cover transmission, distribution, metering services, market and system operator fees, cross-subsidy, and where relevant, capacity or stranded costs—with any future adjustments applying equally to bulk power consumers and other open-access users.
The regulator has directed all XWDISCOs to promptly submit UoSC petitions based on CY2026 tariffs, covering all consumer categories intending to join the wholesale electricity market. Distribution companies and K-Electric must also provide complete data on Maximum Demand Indicators and related sales figures for relevant consumer categories.
The decision has been forwarded to the federal government for official Gazette notification. Under Section 31(7) of the Nepra Act, the government has 30 days from notification to publish the decision, after which Nepra will do so itself if no action is taken. The government must also notify Nepra's earlier December 18, 2025 decisions concerning each of the former Wapda distribution companies.
Copyright Business Recorder, 2026