1. A one cent per kWh Use of System Charge is the most defensible starting point for CTBCM market opening because it directly enforces the core non-discrimination principle. Similarly placed bulk consumers must face comparable grid charges irrespective of supplier, and a uniform, low entry UoSC makes this test operational rather than theoretical from day one.
2. A lean entry UoSC materially reduces early legal and regulatory risk by limiting the scope to characterize network pricing as a disguised barrier to entry or an incidence-loaded penalty. By keeping access pricing narrowly confined to network service costs, it becomes structurally difficult to challenge CTBCM as discriminatory or exclusionary at inception.
3. From a commercial readiness perspective, a one cent base improves bankability by enabling suppliers and buyers to price multi-year bilateral contracts on a stable and rules-based access charge. Predictable network pricing supports contract standardization, lowers transaction costs, and simplifies settlement across portfolios, which is essential for early market liquidity.
4. The same simplicity improves auditability and dispute resolution. Reconciliation under a flat, published wheeling charge becomes a mechanical function of wheeled energy rather than a contested aggregation of legacy obligations, cross-subsidy incidence, or discretionary adjustments that otherwise generate reopeners and persistent renegotiation risk.
5. From a system economics standpoint, a low UoSC prioritizes throughput formation at a time when the sector faces billed-volume erosion and rising unit costs from fixed-cost dilution. Lean access pricing encourages kilowatt-hours to migrate back onto the grid, improves utilization of committed network and generation assets, and reduces inefficient make-or-buy distortions driven by regulation rather than engineering.
6. As volumes stabilize and expand, average fixed cost per unit can decline, which is a necessary condition for sustainable affordability and long-run competitiveness. This dynamic is especially important in a system with surplus capacity, where suppressing transactions through high access charges is economically counterproductive.
7. From a structural reform and policy integrity perspective, a one cent anchor enforces discipline in cost classification by keeping UoSC aligned with efficient transmission and distribution service and approved technical losses only. Legacy and stranded obligations are better addressed through explicit, transparent instruments rather than being embedded in access pricing.
8. This approach aligns with international open-access practice, where supplier-neutral network tariffs function as platform services, while policy objectives are pursued through separate levies or regulated mechanisms under clear governance. Inflating the base access charge risks incidence disputes that can stall market formation.
9. Finally, the one cent benchmark is supported by project evidence and is not trivial in revenue terms when applied at scale. USAID PSIA work identifies a competitive wheeling band of roughly one to one and a half cents per kWh, consistent with early market formation and exporter viability.
10. At scale, recovery remains material: an 800 MW wheeling quantum at a 60 percent load factor yields about 4.2 billion kWh annually, generating roughly PKR 11.8 billion per year at PKR 2.80 per kWh. Lean pricing thus delivers sustainable network revenue by enabling volume formation rather than suppressing transactions at inception.
11. Under the Third Party Access framework, OGRA sets transportation tariffs separately for Transmission and Distribution under the TPA Rules, 2018 and Article 25 of the Pakistan Gas Network Code, split into Capacity and Utilization Charges. On FY 2023–24 actuals, Transmission totals PKR 47.30 per MMBtu (≈16.1 paisa/kWh), while Distribution totals PKR 195.98 per MMBtu (≈66.9 paisa/kWh), illustrating that a one cent per kWh UoSC remains well within established cost-reflective bounds. (Slide is attached as ready reference, OGRA yet to decide FY 2025-26 tariff i.e. PKR per MCF or ~One MMBtu)