The National Electric Power Regulatory Authority (NEPRA) on Wednesday hinted at increasing electricity rates by Rs4.34 per unit for the consumers of all distribution companies (DISCOs) except for K-Electric even with the Lahore High Court’s Rawalpindi bench barring the authorities concerned a day earlier from collecting the fuel price adjustment (FPA) charges.
In another application, NEPRA has also indicated to reduce power tariff by Rs4.10 per unit on account of FPA for the consumers of the K-Electric.
The power regulator held a public hearing at its headquarters on FPA for the month of July 2022 for distribution companies, NEPRA said in a statement.
The public hearing was presided over by NEPRA Chairman Tauseef Farooqui. Other members including engineers Rafiq Ahmad Shaikh and Maqsood Anwar Khan were also present on the occasion.
The Central Power Purchasing Agency, Guarantee Limited (CPPA-G), on behalf of power distribution companies (DISCOs), had submitted a request for an increase of Rs4.69 per unit under FPA for the month of July.
According to a preliminary check of data, the increase comes to Rs4.34 per unit, NEPRA observed during the public hearing.
Earlier, customers were charged Rs9.90 per unit on account of FPA for the month of June.
NEPRA added that it was applicable only for one month.
Consumers will be charged Rs5.55 per unit less on account of FPA for July in comparison with June, NEPRA said, adding that it would also be applicable for one month only.
This would be applicable to the customers of all DISCOs except lifeline customers, NEPRA added.
The authority will issue its detailed decision after further scrutiny of the data.
The electricity production cost stood at higher level during the month of July.
The cost of coal-based electricity stood at Rs20.21 per unit, high-speed diesel (HSD) Rs27.8 per unit, residual fuel oil (RFO) Rs35.6 per unit, indigenous gas Rs9.9 per unit, regasified liquefied natural gas (RLNG) Rs28.2 per unit, nuclear-based power Rs1.04 per unit, and Rs22.8 per unit from that imported from Iran.
The share of hydel generation in total energy mix was 35.1%, coal 12.7%, HSD 1.46%, RFO 6.20%, local gas 10.36%, RLNG 14.9%, nuclear-based power 14.20%, and the electricity imported from Iran 0.33%.
The reference fuel cost was Rs6.28 per unit. However, its actual cost swelled to Rs10.98 per unit, registering an increase of Rs4.69 per unit.
NEPRA also indicated to reduce power tariff from Rs4.10 per unit to Rs3.63 on account of FPA for the K-Electric consumers.
Karachi’s power supplier had also submitted an application to increase its power tariff by Rs14.53 per unit on account of the fourth quarter adjustment of the financial year 2021-22.
The K-Electric had also submitted a request for a reduction of Rs3.48 per unit on account of FPA for the month of July.
The regulator conducted a public hearing to consider the reduction in power tariff on account of FPA and quarterly adjustment.
Earlier, consumers were charged with an increase of Rs11.10 per unit on account of FPA for the month of June 2022, which was also applicable for one month only, NEPRA said in a separate statement.
It added that the reduction in power tariff for the month of July would also be applicable for one month only.
According to a K-Electric spokesperson, the Impact of quarterly adjustments was usually not passed on to consumers under the uniform tariff policy applicable across the country.
However, the final decision rests with the federal energy ministry, government and NEPRA.
July’s FPA was lower compared with the previous month primarily due to the decrease in fuel prices.
The K-Electric spokesperson added that the price of power purchased from CPPA-G in July this year had decreased by 31% as compared with June 2022.
Similarly, the price of RNLG decreased by 16% in July from the previous month.
For furnace oil, the price in July increased by 4% from June.
FPA is incurred by utilities due to global variation in fuel prices used to generate electricity and change in the generation mix.
Furthermore, consumers also benefit when fuel prices decline in comparison with the reference month.
FPA is applied after NEPRA’s scrutiny and public hearings, which are conducted independently for the K-Electric and state-owned entities.