Revenue-based power outages by Discos have no legal basis: NEPRA

ISLAMABAD: Power distribution companies came under criticism on Tuesday over revenue-linked electricity load-shedding, as the National Electric Power Regulatory Authority (Nepra) said the practice was illegal and lacked any legal basis.

The issue came up during a public hearing held by Nepra to consider a proposed increase of up to Rs0.27 per unit in electricity tariffs under the fuel cost adjustment for March 2026.

According to details shared at the hearing, consumers in areas with weak bill recovery have been facing longer outages following directions from the Power Division, as distribution companies were taking a hit to their revenue collections.

Officials of power companies told the regulator that if revenue-based load-shedding was stopped, it could result in an addition of more than Rs500 billion to the circular debt.

Tariff adjustment and power costs

Nepra was informed that the average cost of electricity stood at Rs8.26 per unit in March, compared with the reference price of Rs7.99 per unit.

The hearing was convened to examine the proposed fuel cost adjustment for the month, under which consumers may face an increase of up to Rs0.27 per unit.

Circular debt and demand figures

During the proceedings, participants were told that circular debt had reached Rs1,837 billion by February 2026, showing a temporary rise from June 2025 that was said to be mainly due to timing differences.

It was further stated that the debt position improved in March, when it declined to Rs1,798 billion. Officials also said the debt was projected to reach zero net addition by the end of the year in line with the Circular Debt Management Plan.

The public hearing was also informed that electricity demand rose by 6.38% in March. Peak generation during the month was recorded at 18,551 megawatts.

Officials said the number of protected consumers had increased from around 11-12 million to 22 million.

Summer outlook and fuel supply

It was highlighted at the hearing that hydropower generation could reach 5,500 megawatts in May 2026 amid forecasts of a heatwave during the peak summer period.

The government has also procured spot liquefied natural gas at $23 per million British thermal units, and it was stated that this would translate into a per-unit cost of Rs42.

Participants at the hearing said distribution companies had reduced losses to 15.3% from 15.7%, while bill recoveries improved to 99% from 97%.

They added that Discos posted losses of Rs221 billion during July-March 2024-25, which fell to Rs176 billion in the corresponding period of 2025-26.

Industry response

Industrialists attending the hearing appreciated the government’s efforts to raise the supply of locally produced gas to power plants.

However, they questioned where the gas had gone that was previously curtailed because of the inflow of surplus LNG imports into the country.