IslamabadPakistan’s Q1 capacity savings total Rs63.94 billion.
Idle-plant capacity charges drove the surplus; the National Electric Power Regulatory Authority said savings yield Rs1.75 per unit consumer relief in June–August.
A May 19 hearing sets final rates; fuel costs could erode the Rs2.15 net reduction.
Sources: Dawn
WHAT A CAPACITY CHARGE IS
Pakistan's power purchase contracts pay independent producers a fixed monthly fee just for being available — whether the grid dispatches them or not. The fee covers the plant's debt service and equity return, denominated largely in dollars. Consumers pay it through tariffs even when the plant sits idle.
WHY THE FLEET SITS IDLE
Pakistan built roughly 45 GW of generation capacity against a peak demand near 30 GW. The surplus arrived just as tariff hikes and rooftop solar pushed grid consumers off-system. Plants that cost billions to build now run at low utilization while their capacity payments keep accruing.
THE 1994 ORIGIN
The IPP framework was crafted under Benazir Bhutto's 1994 power policy to break chronic blackouts. To attract foreign capital fast, the state guaranteed dollar-indexed returns and take-or-pay offtake. It worked — capacity arrived. The bill came due decades later, when the rupee collapsed and demand growth stalled.
THE RUPEE TRANSMISSION
Capacity payments are largely dollar-denominated. Every 10% rupee depreciation raises the capacity bill in rupee terms by roughly the same amount, even if not a single new megawatt was added.
WHO NEPRA IS
The National Electric Power Regulatory Authority sets tariffs through quarterly adjustments and an annual base review. It is technically independent but operates inside a triangle of pressures: IMF program targets, the Power Division's political demands, and consumer affordability. The Rs1.75 relief is the rare moment when the math points in the consumer's favor.