ISLAMABAD: The power regulator has allowed K-Electric to charge an unprecedented Rs11.10 per unit as additional fuel cost adjustment (FCA) — or Rs21.7 billion in total — from users on account of the electricity they consumed in June.

However, in its notification issued on Thursday, the National Electric Power Regulatory Authority (Nepra) directed the Karachi-based power utility to ensure the FCA is charged in two instalments — Rs9.90 per unit in August and Rs8.09 in September.

This was done to stagger a massive impact of about Rs18 per unit on consumers in one month, given an outstanding backlog of about Rs6.89 per unit for May consumption when, too, the regulator had divided April’s FCA in two parts to ensure a uniform fuel cost adjustment of about Rs7.90 per unit across the country.

The regulator ordered that out of Rs11.10 additional FCA for June, Rs3.0114 per unit shall be charged in the billing month of August and the remaining, i.e. Rs8.09 per unit, shall be charged for September.

In addition, the KE was also directed to charge Rs6.89 per unit for the FCA of May in August.

The utility’s consumers would effectively pay Rs9.90 per unit FCA in August and Rs8.09 per unit in September on top of future FCA that has to accrue for electricity consumption in July.

The regulator has already cleared Rs9.90 per unit FCA to be recovered from consumers of other distribution companies in August with a financial impact of Rs132bn.

Nepra said it realised that a massive FCA burden was unbearable to consumers. “Burdening the consumer with FCA of June, i.e. Rs11.10 per kWh, in August would not be in the interest of the consumers,” it said. “The authority has further noted that in the matter of XWDISCOs [power distribution companies previously managed by Wapda], the authority has allowed Rs9.8972 per kWh as FCA for the month of June to be recovered in the month of August.”

Therefore, the regulator has “decided to charge Rs3.0114 per kWh for the FCA of June in the billing month of August and the remaining (Rs8.0909 per kWh) shall be charged in the billing month of September,” it added.

Published in Dawn, August 12th, 2022