ISLAMABAD: With a meagre 1.3 per cent growth in electricity demand over last year, the public sector power companies have sought about Rs1.04 per unit negative fuel price adjustment (FCA) for electricity consumed in December.
If approved, the ex-Wapda distribution companies (Disco) would have to refund about Rs3.9bn to consumers in February. The fuel cost for the consumption month of December 2024 is about Rs1.42 per unit lower than December 2023.
This will be the sixth month in a row that FCA remains negative mainly because of substantial fuel cost allowed by the National Electric Power Regulatory Authority (Nepra) through a 20pc increase in base tariff effective July 1, 2024. About 78pc of the total power supply during the month of December flowed from domestic fuel sources, almost half of that at zero fuel cost.
Power companies to refund Rs3.9bn to consumers in February if Nepra approves the move
The Central Power Purchasing Agency (CPPA), which filed the petition for negative adjustment of fuel cost for December, said the power consumption was 1.3pc higher than the same month of last year and 2.6pc lower than November 2024. It reported that electricity delivered to Discos stood at 7,516 gigawatt hours (GWh) in December as compared to 7,716GWh in November and 7,418GWh in December 2023.
Another key feature in the petition is about 13pc lower fuel cost in December 2024 over the same month of previous year, which apparently stems from substantially higher base tariff for the current year and higher contribution from local fuels.
The power companies have claimed in their petition that average fuel cost amounted to Rs9.60 per unit in December 2024 compared to Rs11 per unit during the same month in 2023.
Nepra has called a public hearing on Jan 30 to take up the petition filed by the CPPA, a subsidiary of the power division, seeking a decrease of Rs1.0353/kWh over the reference fuel charge of Rs10.6364 per unit. The CPPA said the actual fuel cost turned out to be Rs9.60 per unit. It sought application of revised FCA in the billing month of February 2025.
It said that about 7,800GWh electricity was generated at an estimated fuel expenditure of Rs71bn (Rs9.09 per unit) in December, of which 7,516GWh energy was delivered to Discos at a cost of Rs72bn (at Rs9.60 per unit).
Nuclear energy took over the top position in electricity supply to the national grid as hydroelectric supply dropped in the last week of December due to annual canal closure. Nuclear power contribution to the grid improved to almost 26.5pc, up from less than 21pc in November.
The share of hydropower on the other hand dropped to 22.8pc in December from 35.61pc in November. Hydropower has no fuel cost.
The third biggest share in the national grid came from RLNG at 20.7pc, up from 11.3pc in November. This was followed by a 12.3pc share from local gas in December, up from 10.7pc in November.
The supply from coal-based generation dropped drastically to 11.6pc in December from its 19pc share in November. Of this, the share of local coal-based generation dropped to 10pc in December from 12.68pc in November and imported coal share also fell to 1.6pc from 5.94pc in November.
The LNG-based power generation cost in December stood at Rs22.73 per unit, followed by Rs19 per unit on imported coal and Rs17.7 per unit on local coal, which surprisingly increased from Rs14.36 per unit in November.
On the other hand, the cost of local gas-based generation stood at Rs13.4 per unit and that of nuclear fuel at Rs1.7 per unit. Three renewable energy sources — wind, bagasse and solar — together contributed 5.6pc share to the grid. Wind and solar have no fuel cost, while the cost of bagasse-based generation stood at Rs5.98 per unit.
Published in Dawn, January 18th, 2025
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