Reduced Hydel Output May Impact FY26 Tariffs

NEPRA has cautioned that lower hydropower generation could significantly influence the proposed electricity tariff adjustments for fiscal year 2025-26. The regulatory body highlighted that diminished hydel output, due to water shortages or climatic changes, may increase reliance on costly thermal sources, leading to higher consumer tariffs. This development poses challenges for maintaining affordable and stable electricity pricing.

Nepra has warned that reduced hydropower generation caused by declining rainfall will negatively impact the proposed FY 2025–26 electricity tariff rebasing, reducing anticipated consumer relief. Nepra Chairman Waseem Mukhtar told the Senate committee that while consumers currently benefit from a Rs 7.41/unit price cut, further relief under QTA and FCA remains uncertain due to economic and fuel price volatility.

Power Minister Awais Leghari reported Rs 161.472 billion in outstanding dues from provinces, with only Punjab willing to reconcile. He also criticized the absence of senior power officials during the briefing. Additionally, removing Time-of-Use meters could cost the industrial sector Rs 35 billion, according to a study with Aptma.