ISLAMABAD: The National Electric Power Regulatory Authority (Nepra) on Thursday notified about a 79 paise per unit additional fuel cost adjustment (FCA) in power tariff for ex-Wapda distribution companies (Discos) for one month to mop up about Rs4.5bn in additional funds in the current billing month.

“The adjustment, an increase of Rs0.7917/kWh, shall be applicable to all consumer categories except Electric Vehicle Charging Stations (EVCS) and lifeline consumers,” Nepra stated in a notification, adding that the adjustment will be displayed separately on consumers’ bills based on the units billed in March 2023.

The ex-Wapda Discos had proposed an additional FCA of Rs1.17 per unit to generate approximately Rs9.5bn in additional funds for the billing month of May. According to the Discos, the actual pool fuel cost for the month of March 2023 was Rs9.88 per kWh, which included previous arrears claim of Rs13.385bn, having an impact of around Rs1.58 per kWh. This left an overall gap of Rs1.17 per unit against the reference fuel cost component of Rs8.71 per kWh.

The regulator, however, calculated a positive FCA of 79 paise per unit to yield about Rs4.5bn.

The increase in FCA in March was despite the fact that over 63pc of power generation in the national grid was from domestic cheaper fuels, and there was an unprecedented Rs7 increase in the base tariff along with the imposition of surcharges in recent months.

Under the tariff mechanism, changes in fuel costs are passed on to consumers on a monthly basis through an automatic mechanism. However, quarterly tariff adjustments, which account for variations in power purchase price, capacity charges, variable operation and maintenance costs, use of system charges, and the impact of transmission and distribution losses, are built in the base tariff by the federal government.

Published in Dawn, May 26th, 2023