ISLAMABAD: Confirming a shortfall of about 5,400 megawatts leading to nationwide power cuts, the National Electric Power Regulatory Authority (Nepra) on Thursday finalised Rs4.68 per unit additional fuel cost adjustment (FCA) for ex-Wapda distribution companies (Discos) and notified Rs3.3 per unit additional FCA for K-Electric.

The FCA of Rs4.68 per unit for electricity consumed in February for Discos was finalised by the regulator at a public hearing presided over by Nepra chairman Tauseef H. Farooqui against a demand for Rs4.95 per unit increase. This will yield about Rs38.3 billion additional funds to Discos in April.

FCA for KE was separately notified by the regulator at the rate of Rs3.3 per unit for electricity sold in January to provide about Rs3.4bn additional funds to the Karachi-based power utility in the billing month of April.

The Central Power Purchasing Agency (CPPA), on behalf of all ex-Wapda Discos, has sought over 117pc (Rs4.95 per unit) increase in their FCA to Rs9.2 per unit for electricity sold in February to generate about Rs39bn additional. The regulator, however, finalised Rs4.68 per unit additional FCA after minor disallowances.

Chairman Farooqui, after checking with power companies and Nepra’s relevant officers, said the country currently faced 5,372MW shortfall. He said about 2,139MW shortfall was because of fuel shortage. In addition, he said Karachi Nuclear Plant (K-2) went out of the system due to tripping while K-3 was still in the testing phase. He reported that Chashma plant-1 also faced some technical fault on Wednesday.

However, he wondered why the relevant authorities had been unable to overcome the shortfall when the government had been claiming the availability of 40,000MW of generation capacity. “There should have been no problem on non-availability of 5,000 or 7,000MW of electricity from such a big portfolio,” he observed.

It has become increasingly common that reference fuel costs approved by the government and the regulator turn out to be highly unrealistic, a question mark on their economic and financial analytical skills. In recent months, the actual fuel costs have ranged 56pc to 117pc higher than the reference rate. This results in sudden price shocks to consumers on account of monthly fuel adjustments on top of repeatedly increasing base power tariffs apparently at the behest of foreign lenders.

Published in Dawn, April 1st, 2022