In a decisive move to stabilize Pakistan’s power sector, the NEPRA tariff revision has introduced a series of major policy changes designed to reduce long-term costs and minimize foreign exchange risks. The announcement came during a public hearing on April 24, 2025, at NEPRA’s Islamabad headquarters, chaired by Mr. Waseem Mukhtar. The hearing focused on tariff adjustments for key thermal power plants — Haveli Bahadur Shah, Balloki, NPGCL, and CPGCL.
Shift from Dollar to Rupee-Based Indexation
One of the most critical reforms is the replacement of dollar-based indexation with rupee-based indexation for the full operational lifespan of the listed power plants.
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New Limits on O&M Cost Adjustments
NEPRA also introduced a cap on Operations & Maintenance (O&M) cost indexation. Now, only 70% of the rupee’s devaluation will be considered, down from the previous 100%. For local expenses, the indexation rate is now tied to either a fixed 5% or the 12-month average of the National Consumer Price Index (NCPI), whichever is lower. This will further control inflation-related adjustments and ease pressure on electricity prices.
Revised Return on Equity Model
In another major shift, the return on equity (ROE) structure has been redefined. This performance-driven approach replaces the earlier system that guaranteed 100% ROE regardless of plant productivity.
Projected Savings and Public Response
These structural changes are projected to save the national exchequer Rs. 1.6 trillion over the lifespan of the affected projects. In the ongoing fiscal year alone, expected savings stand at Rs. 22 billion.
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