ISLAMABAD: Citizens will see an extra cost of up to Rs11.5 per unit in their August bills for the electricity they consumed in June after the national power regulator, Nepra, allowed distribution companies to charge an additional Rs155 billion to compensate for the higher fuel generation cost in June.

On Thursday, Nepra allowed unpreceden­ted fuel cost adjustments (FCA) of Rs11.37 to Karachi power utility K-Electric and Rs9.89 per unit to electricity distribution companies previously owned by Wapda, or Discos.

The higher electricity rates will be charged to all consumers in the billing month of August, except those whose monthly power consumption is fewer than 50 units.

On Tuesday, the government announced an increase of Rs7.91 per unit in average base tariff across the country in three phases starting with effect from July. It has also approved Rs1.55 per unit increase in base tariff across the country under a quarterly adjustment.

Nepra approves Rs11.37 per unit additional FCA for K-Electric, Rs9.90 for Discos

At the conclusion of two separate public hearings presided over by Nepra chairman Tauseef H. Farooqui and members Rafique Shaikh and Maqsood Anwar Khan, the power regulator “graciously” cut two paise each from the tariff increase demanded by both K-Electric and all 10 Discos.

The Central Power Purchasing Agency (CPPA) — a subsidiary of the power division — earlier filed a petition on behalf of Discos for a record Rs9.91 per unit additional mon­thly FCA for electricity sold to consumers in June to generate about Rs133bn in additional funds through the billing month of August.

The additional FCA is almost 166pc higher than the reference fuel cost charged to consumers in June, which is also an unprecedented mismatch between estimated and actual fuel costs. However, Nepra cleared an additional FCA of Rs9.89 per unit, two paise less than the amount sought.

Separately, K-Electric had requested for Rs11.39 per unit additional FCA for June with an additional revenue impact of Rs22.25bn. The Karachi-based power utility said a major reason behind its higher FCA was 50pc expensive liquified natural gas (LNG) and a 74pc increase in power purchase from the CPPA. As a result, Nepra cleared an additional FCA of Rs11.37 per unit.

Data showed that despite 52pc power generation from cheaper domestic resources with static prices, the Discos fuel cost increased by about Rs133bn in June. The CPPA claimed that Discos charged consumers a reference fuel cost of Rs5.93 per unit in June, but the actual cost turned out to be Rs15.84, hence an additional charge of about Rs9.91 to consumers, an increase of 166pc.

The share of domestic fuel sources in overall power generation was slightly lower at 52pc in June compared to 54pc in May and better than 50pc in April and 45pc in March.

The share of hydropower supply, which has no fuel cost, in the overall basket stood almost unchanged at more than 24pc, as was in May.

The share of nuclear power significantly dropped to 9pc in June from 13pc in May and 17.37pc in April after the 1,100-megawatt K-2 plant closed for refuelling.

As a result, the biggest contribution of over 24.4pc in overall power supply came from power plants running on imported RLNG, some of which was bought at highly expensive rates. That share of RLNG in June was nominally higher than 23pc in May.

The share of domestic gas in power generation increased to almost 11pc in June from 10pc in May and April.

The share of coal-based power plants was almost unchanged at 13.6pc in June and May but was significantly lower than 16.74pc in April and 25pc in March. The cost of power generation from domestic gas dropped to Rs8.9 per unit in June from Rs10.12 in May. The cost was Rs8.4 in April and Rs7.75 in March.

Three renewable energy sources — wind, bagasse and solar — together contributed 7pc power supply in June against 6.5pc in May.

With a share of 9pc in the overall power supply, the most expensive power generation came from furnace oil-based plants at Rs36.2 per unit in June against Rs33.67 in May, Rs28.2 in April and Rs22.52 in March.

The CPPA claimed that a total of 13,876 gigawatt-hours (GWh) were generated at the cost of Rs204bn in June, whereas net units delivered to Discos stood at 13,471 Gwh at the cost of Rs214bn.

Published in Dawn, July 29th, 2022

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