ISLAMABAD: National Electric Power Regulatory Authority (Nepra) has approved Uniform Use of System Charges (UoSC) for bulk power consumers (BPCs) and other open-access users, a key step towards operationalising Pakistan’s competitive wholesale electricity market while ensuring that consumers using different suppliers face the same grid charges. The regulator approved uniform variable grid charges ranging from Rs6. 23 to Rs19. 62 per unit, depending on the consumer category, for open-access users participating in the competitive wheeling auction process. A fixed grid charge of Re1 per kW per month, based on sanctioned load, will also apply. The decision, issued on September 7, 2026, was taken on a Federal Government motion and policy guidelines seeking uniform application of UOSC across the eleven ex-Wapda distribution companies (XWDISCOs), including K-Electric (KE). READ MORE: Amendments to CSM proposed: Nepra acts to enable bulk consumers to procure power Nepra said the move was necessary to provide a level playing field to bulk power consumers and other open-access users under the Competitive Trading Bilateral Contract Market (CTBCM). The Power Division had filed the motion on May 25, 2026, arguing that the Commercial Market Operations Date (CMOD) had already been declared on January 22, 2026, while the first market auction was scheduled for June 2026. It maintained that market-liberalisation reforms could not be delayed and that uniform UoSC and uniform transmission and distribution (T&D) losses needed to be determined at the earliest. Under the approved structure, the uniform UoSC will apply to open-access consumers irrespective of their supplier, with the charges comprising transmission charges, distribution charges and cross-subsidy, while stranded costs will be separately applied to consumers who opt for open access without participating in the competitive wheeling auction. Uniform charges approved: For consumers participating in the competitive wheeling auction process, NEPRA approved the following variable grid charges: (i) B-3 Rs6. 23/kWh; (ii) B-4 Rs9. 09/kWh; (iii) C-3 Rs14. 95 /kWh; (iv) C-2(a) Rs19. 62/kWh; (v) C-2(b) Rs17. 74/kWh; (vi) A-2(c) Rs19. 14/kWh; (vii) A-3 Rs19. 10/kWh; and (viii) D-2(b) Rs6. 72/kWh. A fixed grid charge of Rs1/kW/month will be charged based on sanctioned load. According to Nepra’s determination the approved uniform charges were calculated by applying the methodology used for uniformisation of consumer-end tariffs, rather than the methodology initially used by the Power Division in its proposal. The regulator’s approved UoSC structure comprises transmission charges, distribution charges and cross-subsidy. For example, the total variable grid charge for B-3 consumers is Rs6. 23/unit, including Rs1. 60 transmission charges, Rs1. 99 distribution charges and Rs2. 63 cross-subsidy. For B-4 consumers, the total is Rs9. 09/unit, including Rs1. 26 transmissions, Rs2. 78 distributions and Rs5. 05 cross-subsidy. Nepra observed that the cross-subsidy component had been calculated using the weighted average rate across all Discos, consistent with the methodology used for determining uniform consumer-end tariffs. The regulator considered this approach appropriate for ensuring uniform recovery and maintaining a level playing field between grid and wheeling consumers belonging to the same category. Higher charges for consumers bypassing auction: Consumers opting for open access without participating in the competitive wheeling auction will have to pay an additional stranded-cost component. Nepra approved stranded-cost components of Rs12. 94/kWh for 11kV consumers and Rs16. 35/kWh for consumers connected at 132kV/66kV. Consequently, the total variable UoSC, including stranded costs, has been set at: B-3: Rs19. 17/kWh, B-4: Rs25. 45/kWh, C-3: Rs31. 30/kWh, C-2(a): Rs32. 56/kWh, C-2(b): Rs30. 68/kWh, A-2(c): Rs32. 08/kWh, A-3: Rs32. 04/kWh and D-2(b): Rs19. 66/kWh. The same Re1/kW/month fixed grid charge will apply. Uniform charges to apply to K-Electric consumers: The Federal Government had specifically sought application of the uniform UoSC to K-Electric, arguing that any resulting financial gap should be addressed through an additional charge rather than through a government subsidy. The Power Division had proposed that the additional charge be imposed on wheeling consumers to maintain fiscal neutrality and avoid an additional subsidy burden on the federal government. It also proposed an amendment to Strategic Directive 88 of the National Electricity Plan 2023-27 to provide for application of XWDISCO open-access charges to the privatised distribution company, with any resulting financial impact addressed through an additional charge. However, Nepra rejected the proposal to recover this additional charge exclusively from open-access consumers. The regulator held that imposing the charge only on wheeling consumers would create discrimination between open-access consumers and equally placed consumers served by suppliers of last resort (SOLRs). It said such an approach would conflict with the requirement for uniformity and a level playing field under the National Electricity Policy 2021 and National Electricity Plan 2023-27. Nepra therefore decided that the additional charge would be applied to all consumers—both open-access users and consumers of SOLRs. The regulator further observed that, internationally, network use-of-system costs are generally treated as regulated and supplier-neutral costs and applied uniformly to users of a network. It said uniform and non-discriminatory UOSC were a structural requirement for a functioning competitive electricity market. DSS also applicable: Nepra also agreed with the Power Division’s position that the Debt Servicing Surcharge (DSS) would apply to wheeling consumers in the same manner as it applies to regulated consumers. The regulator noted that DSS is a federal government surcharge imposed under Section 31(8) of the Nepra Act and that electric power suppliers are legally required to collect such surcharges when notified by the federal government. However, Nepra directed that the federal government must ensure that imposition of the surcharge remains within the limits prescribed under Section 31(8) of the Nepra Act. Disco differentials shall not be recovered from wheeling consumers alone. Another important aspect of the decision concerns differences that will arise among DISCOs because the same UOSC is being applied uniformly despite variations in their individual costs. The Power Division initially proposed that the differential arising from uniform UoSC be calculated annually and recovered from open-access consumers through a prior-period adjustment. Nepra, however, rejected the proposal to place the entire burden on wheeling consumers. The authority held that doing so would result in open-access consumers paying different UoSC from equally placed consumers served by SOLRs, defeating the principle of uniformity and non-discrimination. Nepra therefore decided that inter-Disco differentials arising from uniform UoSC would be settled through the same mechanism currently used for settlement of differentials arising from the uniform consumer-end tariff. The regulator said no separate formula-based mechanism was required. Uniform T&D losses approved: Nepra also approved uniform T&D losses for open-access consumers. For consumers connected at 11kV, the uniform loss factor has been fixed at 8. 04 percent, lower than the 8. 42 percent proposed by the Power Division. For consumers connected at 132kV, the regulator approved a uniform loss factor of 1. 51 percent, as proposed by the Power Division. The authority noted that application of uniform losses could potentially create an energy surplus in Discos with lower actual losses and a shortfall in Discos with higher losses. Generators supplying bulk power consumers under the market mechanism would gross up their injections using the uniform loss factor, which could result in either surplus or insufficient energy within a particular Disco territory. Nepra, however, decided not to approve an adjustment mechanism for such energy differentials at this stage because the proposal submitted by the Independent System and Market Operator (ISMO) had not been sufficiently deliberated among all stakeholders. The Power Division, XWDISCOs, K-Electric and ISMO have instead been directed to deliberate on the issue and develop a mechanism for adjustment of any energy differentials. The proposed mechanism is to be submitted during the upcoming UoSC proceedings. Periodic adjustment to continue: Nepra also clarified that UoSC components will not remain permanently fixed. Under the Eligibility Rules, periodic adjustments of UOSC components or related costs will be carried out by Nepra from time to time, in a manner similar to tariff adjustments applicable to consumers of suppliers of last resort. The authority said UoSC includes grid charges covering transmission, distribution, metering services, market and system operator fees, cross-subsidy and, where applicable, capacity charges or stranded costs. Any periodic adjustment will apply equally to BPCs and other open-access users. DISCOs directed to file UOSC petitions: Nepra has directed the XWDISCOs to immediately submit their UoSC petitions based on the CY2026 determined tariffs, including proposals for UoSC for all consumer categories and sub-categories intending to participate in the wholesale electricity market. The Discos and K-Electric have also been directed to coordinate and provide complete data regarding Maximum Demand Indicator (MDI) and associated sales for the relevant consumer categories and sub-categories for which UoSC are being sought. The decision has been intimated to the federal government for notification in the official Gazette. Under Section 31(7) of the Nepra Act, the federal government has 30 calendar days from intimation of the decision to notify it. If it fails to do so within the prescribed period, Nepra will notify the decision itself in the official Gazette. The federal government will also have to notify Nepra’s earlier decisions dated December 18, 2025 regarding each of the ex-Wapda Discos. Copyright Business Recorder, 2026
Nepra greenlights UoSC for bulk consumers
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