The government revealed on Wednesday that power consumption in Pakistan has grown by just 0.5 percent annually over the past six years, despite the continuous addition of new generation capacity. This low growth rate has left consumers bearing the cost of underutilized infrastructure through capacity charges.
Data presented at a public hearing organized by the National Electric Power Regulatory Authority (Nepra) showed minimal change in electricity demand between 2018 and 2024. The total energy supply in July 2018 was 13,740 MW, compared to 14,918 MW in July 2024—a mere 178 MW increase, or roughly 3 percent over six years. Nepra noted that this 0.5 percent growth rate did not correlate with the country’s GDP or population growth.
The hearing was convened to consider a petition filed by the Central Power Purchase Agency (CPPA), which requested Nepra’s approval to refund Rs0.3142 per unit to consumers as part of a fuel charges adjustment (FCA) for July 2024. If approved, Ex-Wapda distribution company (XWDiscos) consumers could receive a total benefit of Rs4.5 billion, reflected in their September bills. Nepra reserved its judgment, with a decision to be announced later.
During the hearing, Nepra sought information on the new generation capacity added over the past six years. It was noted that consumers were not only paying billions in capacity charges to power generators but also for transmission projects that have been underutilized. The 660kV HVDC Matiari-Lahore transmission line, capable of transmitting up to 4,000MW from South to North Pakistan, remains significantly underutilized due to system constraints. A Karachi entrepreneur suggested redirecting the unused capacity in the South to K-Electric, which currently relies on more expensive power due to its inefficient plants.
This situation has led to the operation of costly furnace oil and imported RLNG-based power plants, while more economical generators in the south remain idle, resulting in high electricity costs for consumers. These concerns were raised during a public hearing on a petition filed by power distribution companies. Pakistan has faced transmission issues for years, but the focus has largely been on increasing power generation rather than addressing transmission bottlenecks. Commentators questioned the rationale behind adding more power capacity when demand remains lower than installed capacity, forcing consumers to pay for unused power.
Nepra Sindh Member Rafiq Shaikh expressed concern over the rising electricity bills, which in some cases have exceeded consumers’ rent. “In such a situation, our heads bow in shame,” he said. An official from the National Transmission and Dispatch Company (NTDC) noted that consumers use an average of 12,000 to 13,000 MW of electricity but are charged capacity payments for 40,000 MW.
Rafiq Shaikh questioned how much relief could be provided if system constraints were removed and what the cost of removing these constraints would be to consumers. NTDC officials were unable to provide answers, prompting displeasure from Nepra. It was also revealed that 4,500 MW of electricity could not be transmitted from South to North due to system limitations. Shaikh urged NTDC to analyze the situation and determine responsibility.
Nepra Khyber Pakhtunkhwa Member Maqsood Anwer remarked that he had been hearing about constraints on the High-Voltage Direct Current (HVDC) line for four years. “My term as a member is ending, but there is still no solution to this problem,” Anwer said.
With more power capacity set to come online in the coming years, questions arise about who will bear the cost of capacity payments when consumers are already burdened by existing charges. Concerns were also raised about the 969-MW Neelum-Jhelum hydropower project, which has been non-functional due to structural faults despite the expenditure of hundreds of billions of rupees. Commentators questioned why contractors were not being held accountable for these faults, pointing to the absence of warranties and guarantees, which has led to ongoing issues and additional costs for repairs and maintenance.
