Power tariff may be jacked up by Rs3.5 per unit

NEPRA requested for price increase under Oct fuel charges adjustment

ISLAMABAD:

increase of Rs3.5 per unit in electricity tariff on account of fuel charges adjustment for October 2023.

Sources told The Express Tribune that based on data provided by the Central Power Purchasing Agency-Guarantee (CPPA-G), a tariff hike of Rs3.5339 per kilowatt-hour (kWh) had been requested for October over reference fuel charges of Rs7.8938 per kWh set for ex-Wapda distribution companies (DISCOs). Actual fuel cost came in at Rs11.4177 per unit.

The National Electric Power Regulatory Authority (Nepra) will conduct a public hearing on November 29 to consider the request. According to CPPA-G data, the energy landscape saw in October a diverse mix of power generation sources, each with its unique contribution and cost.

Hydroelectric power accounted for the largest share, constituting 32.54% of the total power production at 3,114 gigawatt-hours (GWh). Local coal-based production followed with a contribution of 13.94% and average cost of Rs12.10 per kWh along with imported coal with a 3.51% share and production cost of Rs13.26 per unit.

Gas-based electricity accounted for 7.35% of total generation priced at an average of Rs13.6059 per kWh while re-gasified liquefied natural gas (RLNG) represented a substantial 20.25% share in electricity production with average cost of Rs23.6987 per kWh. Nuclear power contributed significantly, comprising 19.08% of total generation at a remarkably low average cost of Rs1.2272 per kWh.

A marginal fraction, 0.24%, of electricity was imported from Iran with average cost of Rs23.1678 per kWh. Wind, bagasse and solar power collectively accounted for 3.09% of total generation. Overall, with total energy output of 9,572 GWh, the average cost for October stood at Rs8.2605 per kWh, showcasing the dynamic and cost-varied energy landscape.

However, DISCOs were delivered a net 9,253 GWh at a cost of Rs11.4277 per unit against the reference fuel cost of Rs7.8938 per unit, showing an increase of Rs3.5339. Transmission losses were calculated at 2.93%, or 281 GWh, out of the total electricity generated during October.

Nepra is set to conduct a crucial hearing on October fuel charges adjustment. This adjustment, based on variations in fuel charges and policy guidelines, is in accordance with Section 31(7) of the Nepra Act (XL of 1997) and the tariff determinations of DISCOs.

Nepra aims to ensure that electricity remains accessible and affordable while maintaining safety standards. Under its regulatory framework, fuel charges adjustments are made on a monthly basis. These adjustments are determined based on actual fuel charges and federal government policy guidelines.

Nepra will invite interested and affected parties to participate in the hearing and raise written or oral objections. The hearing provides an opportunity for stakeholders to voice their concerns and contribute to the decision-making process.

Different stakeholders have always been opposing any increase in electricity rates as energy has become unaffordable for consumers due several tariff hikes to meet commitments made under the IMF loan programme. The base electricity price has almost doubled to Rs30 per unit, excluding taxes and fuel charges adjustment, over the past couple of years.

Published in The Express Tribune, November 21^st, 2023.

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