Nepra sets higher grid charges for bulk consumers bypassing competitive power auctions

ISLAMABAD  –  The National Electric Power Regulatory Authority (NEPRA) has notified a two-tier structure for Use of System Charges (UoSC) for open access consumers, making it up to Rs16.35 per unit more expensive for bulk consumers to wheel electricity without participating in competitive bidding. According to a letter issued by NEPRA in pursuance of Sub-Section 7 of Section 31 of the Regulation of Generation, Transmission and Distribution of Electric Power Act, 1997 (XL of 1997), NEPRA has forwarded two decisions for notification.

These include decision of the authority in the matter of federal government Motion and Policy Guidelines for Uniform Application of Use of System Charges, issued vide No  8389-18404 dated 07-09-2026, and  decision of the authority regarding petitions filed by XWDISCOs for Determination of Use of System Charges to the extent of Grid Charges, issued vide No. 21171-21187 dated 18-12-2025. Under the notified decisions, the National Electric Power Regulatory Authority has approved a two-tier structure for “Use of System Charges (UoSC)”, making it up to Rs16.35 per unit more expensive for large electricity consumers to wheel power without participating in competitive bidding.

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According to the NEPRA order, industries and bulk consumers who opt for “open access” through a competitive wheeling auction will pay much lower grid charges. Those who bypass the auction will have to pay an additional “Stranded Cost” of up to Rs16.35 per unit. For consumers who opt for open access through competitive wheeling auction process, the variable grid charges will be Rs6.23 per unit for B-3, Rs9.09 for B-4, Rs14.95 for C-3, Rs19.62 for C-2(a), Rs17.74 for C-2(b), Rs19.14 for A-2(C), Rs19.10 for A-3 and Rs6.72 for D-2(b).

These include a fixed grid charge of Rs1.00/kW per month to be charged on sanctioned load, besides transmission and distribution charges and cross-subsidy. For consumers who avail open access without participating in the competitive wheeling auction process, the charges will be higher on account of stranded cost. In this category, the total variable grid charge will be Rs19.17 per unit for B-3, Rs25.45 for B-4, Rs31.30 for C-3, Rs32.56 for C-2(a), Rs30.68 for C-2(b), Rs32.08 for A-2(C), Rs32.04 for A-3 and Rs19.68 for D-2(b).

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In September, NEPRA had approved a uniform structure of Use of System Charges (UoSC) for power bulk consumers (PBCs) of distribution companies (Discos) and K-Electric (KE) aimed at leading to the launch of a competitive wholesale electricity market. Under Clause 17.1, consumers who buy power directly from generators through a competitive process will only pay between Rs6.23 and Rs19.62 per unit as variable grid charges.

This includes transmission, distribution, and cross-subsidy charges. There is also a fixed charge of Rs1 per kW per month based on sanctioned load. For example, small to medium industrial users in the B-3 category will pay Rs6.23/unit, while large industrial users in C-2(a) will pay Rs19.62/unit. Industrial consumers who take open access without going through the auction will be hit with “Stranded Cost”. With this added cost, the total variable charges jump to between Rs19.17 and Rs32.56/unit. The stranded cost component has been determined as Rs12.94/unit for B-3, C-2(a), C-2(b), A-2(C), A-3 and D-2(b) categories and Rs16.35/unit for B-4 and C-3 categories, depending on voltage level. The fixed grid charge will remain Rs1.00/kW/M.

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