In a major regulatory shift, the National Electric Power Regulatory Authority (NEPRA) has approved new network-use charges for bulk power consumers participating in Pakistan’s emerging open energy market. Under the decision, eligible industrial and commercial buyers will pay network transmission and distribution charges ranging from Rs6.23 to Rs19.62 per unit. The determination clears a critical hurdle for launching a planned 400-megawatt competitive electricity auction under the Competitive Trading Bilateral Contract Market (CTBCM) framework.
What Are the New Electricity Charges in Pakistan?
Why is NEPRA introducing this new fee structure now?
For decades, state-owned distribution companies held an absolute monopoly over power sales in Pakistan. Under the new competitive model, large industrial facilities can bypass traditional state buyers and procure electricity directly from independent power generators at mutually negotiated rates. To use existing national transmission lines and regional distribution grids, these private buyers must pay a network-use fee.
NEPRA set these wheeling charges between Rs6.23 and Rs19.62 per unit depending on grid voltage levels, geographic location, and specific distribution networks. The network fee is billed in addition to the base supply rate negotiated between buyer and seller.
Transitioning Toward a Free Power Market
Will open trading lower costs for Pakistani industries?
The introduction of competitive market charges marks a foundational move toward unbundling the power sector. By allowing bulk consumers to buy directly from generators, the system incentivizes cheaper generation while reducing the state’s financial exposure to costly power purchase agreements.
Industrial manufacturers—including steel, cement, and textile producers—have long cited exorbitant electricity tariffs as a major handicap to global competitiveness. Direct power procurement provides large enterprises a legal framework to secure long-term price stability if negotiated market rates stay lower than regulated DISCO tariffs.
How the CTBCM Model Reshapes Energy Trading
How does the new wholesale market operate in practice?
The Competitive Trading Bilateral Contract Market operates on open-access rules. Private power producers sell electricity directly to high-demand commercial entities. Independent market operators track hourly transactions and manage imbalance charges on the national grid.
This transition gradually phases out sovereign guarantees previously extended by the federal government for every single power generation project. Private market participants assume commercial risk directly, encouraging market discipline and competitive pricing.
Challenges Facing Full Market Implementation
Can open competition solve the energy crisis overnight?
Industry observers urge realistic expectations. While clearing the wheeling tariff removes a major bottleneck, overall success hinges on execution. The widest challenge involves balancing grid infrastructure losses and managing legacy capacity payments that remain tied to traditional utility contracts.
The government must ensure the first 400MW auction proceeds transparently without imposing unintended cross-subsidies on small residential buyers. Ensuring equal grid access for all licensed private suppliers will determine how rapidly the market scales up.
NEPRA’s approval of network charges represents an important milestone toward decentralizing electricity trading across Pakistan. While general household bills remain tied to standard DISCO tariffs, establishing a functional open power market gives Pakistani industry a long-awaited path toward market-driven energy pricing.
