The Federation of Pakistan Chambers of Commerce and Industry (FPCCI) has expressed serious reservations over the five Power Purchase Price (PPP) scenarios prepared by the Central Power Purchasing Agency–Guaranteed (CPPA-G) for the year 2026.
According to sources, the FPCCI stated in a letter sent to the NEPRA Registrar that the forecasts for next year do not align with current market conditions. If implemented without correction, these projections will further erode consumer affordability and put additional pressure on industrial activity.
The letter highlights that CPPA-G’s projected increase in electricity demand contradicts ground realities. Due to high tariffs, declining industrial production, closure of numerous factories, and rapid consumer shift toward rooftop solar systems and captive power, electricity consumption has been continuously shrinking. The FPCCI argues that projecting growth in a contracting market leads to unstable and inaccurate tariff structures.
The federation pointed out that past PPP calculations failed to fully incorporate solar displacement and actual demand behavior. As a result, quarterly adjustments fluctuated drastically—from negative Rs. 1.80 per unit to positive Rs. 0.50. When demand is overestimated, fixed capacity costs are spread over fewer units, automatically increasing quarterly adjustments. Ignoring the rising share of solar will trigger more unpredictable surcharges in the future.
The FPCCI further noted that temporary relief measures can reduce tariffs only for the short term, but without cutting the actual cost of power generation, the burden simply shifts to subsequent quarters. This practice has been ongoing for years and has failed to address structural weaknesses, which remain the main cause of continuous tariff hikes.
The federation also termed the Rs. 22.98 per unit incremental consumption package ineffective, stating that it does not reflect the true usage patterns of industrial consumers. It creates contradictions for captive vs. non-captive users, industries seeking load enhancement, and those intending to change categories. If unrealistic benchmarks fail to generate additional units, PPP and quarterly adjustments will increase even further. The FPCCI emphasized the need to adopt the uniform and logical framework proposed by industry stakeholders.
The chamber added that the load factors included in the Consumer Service Manual have become unrealistic due to the prevailing economic slowdown and widespread solar adoption. It proposed implementing a 40% load factor across all industries to bring demand forecasting closer to real conditions.
To improve demand, FPCCI recommended reforms to the incremental package and appropriate adjustments to the PPP, to encourage additional consumption. The federation stated that with the right improvements, industries are ready to increase demand, which would distribute fixed costs across more units and ultimately reduce the PPP.
The FPCCI stressed that the cycle—where high tariffs reduce demand and reduced demand pushes tariffs even higher—must be broken. Bringing electricity prices down to nine cents per unit is essential to encourage consumers to shift back from captive generation, improve industrial competitiveness, slow the growth of circular debt, and stabilize sector revenues.
The federation noted that despite NEPRA’s repeated emphasis on stakeholder involvement, no genuine consultation was held with industries regarding the incremental package, resulting in policies that do not reflect on-ground realities. FPCCI demanded immediate and formal consultations.
The chamber also highlighted that demand estimates have repeatedly been proven wrong across tariff cycles. The surcharges that keep emerging are clear evidence that current estimation methods do not reflect actual consumer behavior. Without correction, consumers will continue paying for planning errors.
FPCCI further warned that the upcoming federal budget—being prepared in consultation with the IMF—may introduce subsidy reductions, shift lifeline consumers to BISP, and reduce cross-subsidies across categories. Fixing a full-year tariff without accounting for these factors could create serious complications once the budget measures are implemented.
The federation underscored that if actual demand falls short of projections, the per-unit capacity cost will rise sharply. Even a 5% drop in demand could increase capacity charges by Rs. 1.40 to Rs. 1.80 per unit, while a 10% drop may add more than Rs. 3 per unit. These increases will directly raise quarterly adjustments and consumer tariffs. FPCCI urged the adoption of a more realistic, transparent, and data-driven methodology for demand forecasting.
