ISLAMABAD: The National Elec­tric Power Regulatory Authority (Nepra) on Friday notified an additional fuel cost adjustment (FCA) of Rs1.46 per unit for consumers of ex-Wapda distribution companies (Dis­cos) with a net financial impact of Rs22 billion for electricity consumed in July.

The “adjustment of Rs1.4630/kWh shall apply to all the consumer categories except Electric Vehicle Charging Stations (EVCS) and lifeline consumers. The said adjustment shall be shown separately in the consumers’ bills based on units billed to the consumers in July. Ex-Wapda Discos shall reflect the fuel charges adjustment in September’s bill”, said Nepra’s notification that would yield about Rs22bn additional funds to Discos.

The Central Power Purchasing Agency (CPPA), on behalf of ex-Wapda Discos, had demanded Rs2.07 per unit additional FCA for the said month to raise Rs30bn but later revised downward its demand for Rs1.58 per unit to secure Rs23bn for electricity consumed in July. However, the regulator after verifying the certified data based on documentary evidence worked out Rs1.46 per unit additional FCA to be charged to consumers during the current billing month.

The additional FCA has emerged despite almost 64pc power generation from domestic cheaper fuel in July which was higher than 58pc in June, 56pc in May and 54pc in April. Even though the average base tariff has gone up by more than Rs7.5 per unit in July. The additional cost is despite the country’s hydropower plants making a healthy contribution of over 37pc to the overall national power grid in July against 26.96pc in June. Hydropower has no fuel cost.

This is despite 64pc of power generation coming from cheaper domestic fuels

The LNG-based power generation at 19.67pc slightly improved in July when compared to 18.55pc in June but was down lower than its 24.33pc share in May. LNG-based power generation, nevertheless, maintained its second position after hydropower. The third largest share came from coal-based generation at 14.69pc in July, down from its 17.75pc share in June. The nuclear generation slightly improved to 14.2pc in July against 13.54pc in June and 12.6pc in May but was still way behind its 19pc in April and 24.28pc in February.

Power supply from domestic gas continued its downward journey and contributed just 7.61pc to the national grid in July against 8.54pc in June, 10.35pc in May and 12pc in April.

The fuel cost of furnace oil-based power generation increased to 28.7 per unit in July against Rs26.1 per unit in June and Rs23.24 per unit in May. The LNG-based power generation cost in July slightly increased to Rs24.43 per unit against Rs24.07 in June. Furnace oil-based generation in July was contained at 2pc in the overall basket when compared to 5.4pc in June.

The cost of power generation from domestic gas increased to Rs13.7pc unit in July when compared to Rs11.74 per unit in June because of an increase in gas prices notified by the government.

Coal-based power generation cost, on the other hand, dropped to Rs11.54 per unit in July against Rs14.05 per unit in June. This included Rs28 per unit on imported and Rs8 on local coal.

Three renewable energy sources — wind, bagasse and solar — together contributed about 4.5pc share to the national grid in July, down from its 5.6pc share in June and 6.6pc May. Wind and solar have no fuel cost, while that of bagasse-based generation cost remained unchanged at about Rs6 per unit.

The FCA is reviewed every month as per the tariff regime applicable across the country and is usually applicable to the consumer’s bills for one month only. The higher FCA, on notification, would be charged to all consumer categories except lifeline power consumers, domestic consumers consuming up to 300 units, agricultural consumers and electric vehicle charging stations (EVCS). The adjustment on account of monthly FCA is also applicable to domestic consumers having Time of Use (ToU) meters irrespective of their consumption level.

Under the tariff mechanism, changes in fuel cost are passed on to consumers only every month through an automatic mechanism while quarterly tariff adjustments on account of variations in power purchase price, capacity charges, variable operation and maintenance costs, use of system charges and including impact of transmission and distribution losses are built in the base tariff by the federal government.

Published in Dawn, September 9th, 2023