Electricity tariffs for January 2025 will increase by Rs. 0.51 per unit compared to December 2024, as the federal government moves toward early rebasing of the national tariff regime and adjusts peak and off-peak timings.

The tariff hike comes despite lower-than-expected fuel costs for power generation, which made electricity production cheaper compared to the peak summer season. However, adjustments in the fuel cost adjustment (FCA) mechanism have led to the increase.

The Central Power Purchasing Agency (CPPA) has proposed a negative FCA of Rs. 0.63 per unit for electricity consumed in November, replacing the Rs. 1.14 per unit negative FCA applied in December. This adjustment has resulted in the Rs. 0.51 per unit tariff increase for January.

During a hearing chaired by NEPRA Chairman Waseem Mukhtar, inefficiencies within the power sector were heavily criticized. These included an eight-month delay in the Lahore-North grid projects and the underutilization of the Matiari-Lahore Transmission Line, which forces consumers to pay full charges for unused capacity.

The CPPA reported that partial load adjustment charges (PLAC) rose from Rs. 47 billion in 2023 to Rs. 56 billion in 2024. The increase was attributed to unaffordable tariffs and the growing adoption of solar energy, which has reduced reliance on grid electricity.

In response to these issues, NEPRA has ordered a technical study to examine changing electricity demand patterns and an inquiry into delays in transmission projects. The regulator aims to address inefficiencies and ensure that consumers are not burdened with unnecessary costs.