Nepra hearings hint at Rs23b burden

Authority reserves decision on FCA for March 2024 sought by DISCOs

ISLAMABAD:

Power consumers may face an additional financial burden of approximately Rs23 billion as the National Electric Power Regulatory Authority (NEPRA) has completed hearings on a request concerning Fuel Charges Adjustment (FCA) for electricity consumed in March 2024. Although NEPRA has reserved its decision on the FCA for March 2024 sought by the power distribution companies (DISCOs), it is anticipated that the power regulator will adhere to past practices and approve the collection of Rs23 billion from already burdened electricity consumers through the May 2024 electricity bills.

According to NEPRA, the authority will issue a detailed decision after thoroughly scrutinising the facts and figures.

Earlier, the Central Power Purchasing Agency (CPPA) submitted an application to the power regulatory authority at the request of DISCOs to increase the electricity price by Rs2.9402 per kilowatt hour (kWh) under the fuel charges adjustment for March 2024. Subsequently, NEPRA called a public hearing on April 26, 2024.

NEPRA Chairman, Waseem Mukhtar, while presiding over the hearing on FCA for March 2024, noted a consistent decrease in electricity demand. During the hearing, NEPRA’s member from Sindh highlighted consumer shifts to solar electricity due to the high cost of conventional electricity. Additionally, officials from the National Power Control Centre (NPCC) reported a 7.5% decrease in the demand for power in March 2024. Over the year, domestic consumer demand fell by 11.3%, and demand in the industrial sector by 4.5%, according to CPPA officials.

NEPRA officials pointed out that power consumers could have saved Rs58 crore if electricity had been generated through the Guddu Combine Power Plant. In response, NEPRA’s member from Sindh emphasised that NEPRA had received numerous complaints regarding violations of the economic merit order of power plants and assured that NEPRA was reviewing these complaints.

Officials from the National Transmission and Dispatch Company (NTDC) informed NEPRA that electricity demand decreased by 7% in March 2024.

The CPPA, in its application, claimed that the total electricity generated with various fuels in March 2024 was recorded at 8,023 GWh, at Rs8.3109 per unit. The total cost of energy was Rs66,680 million.

According to a break down, power generation with the hydel source was 2,217 GWh, constituting 27.63% with zero cost of power generation, while power production with coal-fired power plants was 862 GWh (local coal) and the total power generated for Rs14,459 million (Rs16.7779/unit). Similarly, the power generated from gas-based power plants was 795 GWh, 9.91% of the total generation, totalling Rs13.6857 per unit, and the generation from Re-gasified Liquefied Natural Gas (RLNG) was 1,658 GWh, which was 20.67% of total generation, at Rs22.1917 per unit. Likewise, power production from bagasse was recorded at 78 GWh, the price of which has been calculated at Rs5.9822 per unit. The electricity generated from wind was recorded at 205 GWh, 2.55% of total generation, and solar at 110 GWh, 1.37% of the total generation in March 2024. Moreover, electricity generation from nuclear sources was 2,070 GWh, which came out at Rs1.5488 per unit, 25.79% of the total generation, and electricity imported from Iran was 28 GWh which amounted to Rs30.3729 per unit, 0.35% of the total power generation in the said month of March 2024.

It is also noted from the data submitted by the CPPA to NEPRA that the net electricity delivered to DISCOs in March 2024 was 7,756 GWh (96.67%) at a rate of Rs9.3819 per unit, with a total cost of Rs72,764 million.

It is pertinent to note that the monthly fuel charges adjustment will apply to all DISCO consumers except those of K-Electric, lifeline users, and electric vehicle charging stations. Furthermore, in the February adjustment, NEPRA increased the price of electricity by Rs4.92 per unit, while in the January fuel charges adjustment, the price was raised by Rs7.6 per unit.

Published in The Express Tribune, April 27^th, 2024.

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