NEPRA approves tariff hike of Rs4.567/unit

Power consumers to bear burden of approximately Rs33.88b, along with 18% GST

Our Correspondent February 03, 2024


The National Electric Power Regulatory Authority (NEPRA) has granted approval for state-run power distribution companies (Discos) to impose an additional charge of Rs4.567 per unit on the bills of power customers for February 2024. This tariff increase, approved on Friday, is in response to fuel cost adjustments (FCA) from December 2023.

Consumers are expected to face a financial burden of approximately Rs33.88 billion due to this decision, and when factoring in the 18% General Sales Tax (GST), the total may rise to nearly Rs40 billion. It is crucial to note that this tariff hike applies to all consumer categories, excluding Electric Vehicle Charging Stations (EVCS) and Lifeline consumers.

The central power purchasing agency (CPPA), representing Discos, had filed a petition stating that in December 2023, consumers were charged a reference fuel cost of Rs5.4031 per unit, while the actual fuel cost incurred was Rs11.0225 per unit. The CPPA argued that the additional cost burden of Rs5.6194 per unit should be transferred to consumers.

After a public hearing on Wednesday, NEPRA conducted a detailed calculation of data and approved an increase of Rs4.567 per unit on Friday.

According to CPPA data submitted to the regulatory authority, 7,726 gigawatt-hours (GWh) of electricity was generated in December 2023, costing Rs78.3 billion (equivalent to Rs10.134 per unit). Out of this, 7,418 GWh, originally priced at Rs81.767 billion, was delivered to distribution companies (Discos), with transmission losses standing at 3.51%.

Comparing December 2023 to the same month in the previous year, power generation saw an 8.21% decrease. However, there was a 2.37% increase in generation compared to the previous month (November 2023).

The generation cost per unit increased significantly, rising by a worrisome 44% to Rs10.134 per unit year-on-year in December 2023 from Rs7.044 per unit in December 2022. Similarly, compared to the previous month (November 2023, unit cost of Rs7.17), there was a 41.3% increase.

Read NEPRA mulls record Rs5.62/unit hike in electricity prices

The per-unit power generation cost from imported coal surged by 18.7% in December 2023 to Rs17.2525/unit from Rs14.5305/unit in November 2023. Meanwhile, the cost of local coal generation remained unchanged at Rs12.3307/unit.

In December 2023, the generation cost from nuclear sources increased by 9.03% to Rs1.316/unit compared to the previous month. Over the corresponding month of the previous year, the cost of generation from nuclear sources increased by 22.7%.

Although the generation from nuclear sources fell substantially by 36% to 1464 GWh in December 2023 compared to December 2022, it decreased by 6.9% compared to the previous month’s generation of 1,572 GWh.

Power generation figures reveal a 24.6% increase to 1,310 GWh from local coal and a 21% cut to 384 GWh from imported coal in December 2023 compared to the previous month.

Notably, in December 2023, the government produced less electricity from renewable and cost-effective sources compared to the same month last year. The underutilisation of these resources contributed to higher costs, impacting consumers with increased payments.

Published in The Express Tribune, February 3rd, 2024.

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