Rs 27.309 per Unit: The Real Fight in Nepra's Hearing Room Isn't About a Batsman — It's About a Power Plant

The first figure that echoed in the hearing room was not a score — it was Rs 27.309 per unit. On that floor of Nepra (National Electric Power Regulatory Authority), six scenarios were presented: the most optimistic at Rs 25.883 per unit, the worst at Rs 29.255 per unit. The middle figure — which CPPA-G (Central Power Purchasing Agency) treated as its base case — sits at Rs 27.309 per unit. In three decades of notebooks, three-tier brackets like this have always said the same thing: when an institution must agree on one number, it rarely offers one number — it offers a range, and on either end of that range sit different pressure groups. For 2027, that range is the real story, and its protagonist is not a batsman but a power plant's capacity payment.

Nepra's public hearing concerns CPPA-G's projected Power Purchase Price (PPP) for calendar year 2027 — the average cost distribution companies will bear for procuring electricity. It looks like a technical exercise, but its political and industrial weight is no less than a mega-auction bid sheet, because this one figure determines how heavy the consumer's bill will be from January 1, 2027. During the hearing, Nepra sought clarification on several points: RLNG (re-gasified liquefied natural gas) supply, the rupee-dollar rate, Brent crude prices, and most importantly — the clash between demand forecasts from CPPA-G, ISMO and distribution companies.

Here the first knot appears. The base case rests on 2.6 percent demand growth and assumes no load management — no power cuts. But in the demand-sensitivity scenario, that same growth falls to 0.70 percent. Total projected electricity sales stand at 130,081 gigawatt-hours. Now imagine the man building that model's spreadsheet — the question before him is not how much electricity will be sold, but if less is sold, who bears the per-unit cost. Because the base case projects total power purchase costs of Rs 3.552 trillion, and of that, Rs 1.914 trillion is capacity charges alone. Capacity payments are tied not to the quantity generated but to available capacity — the plant stands, whether or not it produces, and payment goes out.

This is where mainstream reporting stalls. Headlines stop at "8 percent increase" — a figure that is itself a proposal, not a final. In my experience, whenever a tariff story is compressed into a single percentage, the hardest part of the story drops away. Here that part is clear: in the base case, fuel cost is Rs 10.141 per unit, while capacity payments stand at Rs 14.717 per unit. The most expensive part of electricity is the part that does not burn — it only stands idle. Even in the most optimistic scenario, where fuel is cheap and the RLNG-gas mix is favorable, capacity payments remain fixed at Rs 1.914 trillion. Meaning: even if oil falls, the electricity bill will not get cheaper — because its root lies deep in some IPP (Independent Power Producer) contract, not in the market rate.

This capacity payment is the hidden fixed weight that makes the entire tariff structure inflexible — and it received the least debate in the hearing room, because opposing it means unsealing old contracts, and no regulator opens that knot alone.

Another point recorded at the hearing is often overlooked: Nepra directed CPPA-G to revise KIBOR (Karachi Interbank Offered Rate) from 11.70 percent to 12 percent. This small number looks technical, but its message is clear — this projection is not final, but a draft on the regulator's desk that will keep changing. Similarly, CPPA-G itself acknowledged uncertainty in fuel availability, exchange rates and future FCA (Fuel Charges Adjustment). FCA is the mechanism through which fuel-cost changes reach consumers, and industrial representatives warned that in winter this adjustment could rise two to three times. They demanded immediate suspension of the incremental industrial package and prospective application of FCAs. Here I recalled the old lesson an 11 p.m. phone call taught me in 2026 — the prices of Pune Warriors and Kochi Tuskers Kerala came to me not from an official announcement but from the man who posted the guarantee. In tariff too, the guarantee is the same: the portion of the industrial package that benefits a few industries while imposing cross-subsidy burdens on over 90 percent of consumers, as industrial representatives alleged.

Now we must state the strongest version of the mainstream reading, because it is the most balanced reading of this hearing: since the projection rests on fuel prices, the dollar rate (with the worst case imagining up to Rs 290 per dollar) and RLNG supply — and since all of these were questioned at the hearing — this process is a healthy example of transparency and accountability. After all, questions are being asked before tariff rebasing, not after. This reading is correct, and I fully accept it. The six-scenario framework itself admits that costs are sensitive to prices and rates, and it is also true that Nepra still keeps all three options open — reject, modify or accept. But this reading has a blind spot, which the industrial representatives' complaint and the capacity-payment figures together expose.

The real imbalance is not in the "8 percent increase" — it is in the ratio by which sensitive costs (fuel) can fall while insensitive costs (capacity payments) stand untouched.

The fact that demonstrates this point directly: even if fuel costs genuinely fall — as the optimistic scenario assumes — capacity payments remain at Rs 1.914 trillion. Meaning, the consumer will not receive the full benefit of the fuel saving, because on the path of saving stands a solid wall that does not move with fuel prices. That is why the industrial representatives' demand for "prospective FCA" cannot be dismissed as mere noise — they see each new layer of tariff as a new uncertainty, while their production cost lives not in the middle of the scenario range but in fear of its upper end. And here a second blind spot hides, which both the 2 a.m. phone call and the tariff sheet revealed to me — if demand itself contracts due to higher tariffs, fixed capacity payments get spread over a smaller volume, automatically raising per-unit costs further. This feedback loop is not yet fully counted in the model, because the 130,081 gigawatt-hour sales figure is an estimate, not a guarantee.

Here I return to an old habit, and state it plainly: the mainstream has largely not taken this path. What was not said at this hearing — or not said in the consumer's name — was the pressure to touch capacity payments. No regulator alone opens such contracts, because there comes a 2 a.m. question: if the IPP guarantee is ended, why would any plant be built next monsoon? This statement is not a declaration of guilt against anyone, but the name of the constraint within which this decision will be taken. Still, CPPA-G's admission that forecasts are in conflict on demand, and Nepra's direction to "reconcile" demand — both signals indicate that pressure on the demand model is higher than before. In 2026, in the Mumbai auction room, I learned that the bid on the sheet says nothing alone — the remaining purse alongside it speaks. Here the purse remains, but it has emptied into capacity payments.

The direct implication is that the decision on Nepra's desk is not technical but distributional. The consumer tariff that will apply from January 1, 2027 — and for which industrial representatives sought prospective FCA — will determine whose cost takes priority in this structure. Next time you see a picture of an electricity bill, do not see it as a figure — see it from the side of the man in that room who wrote 12 percent KIBOR, and also from the side of the man in that industrial gathering who knows his bill can rise twice more in winter. Whether the next real shock comes from the Rs 29.255 end or the Rs 25.883 end depends not on the tariff but on the fuel market and that demand reconciliation. And when projected demand again falls to 0.70 percent, asking this will not be a condemnation but a necessary question: while spreading capacity payments over that remaining one or two percent of demand, whose name did Nepra write on its sheet — the consumer's, or the plant's that does not light but does bill?