Consumers overpay for electricity: NTDC

Consumers pay for 40,000 MW capacity but use 12,000-13,000 MW. Relief of Rs1.91/unit expected in September bills.

ISLAMABAD:

The officials of the National Transmission and Despatch Company (NTDC) made a shocking disclosure on Wednesday that consumers were paying a capacity of 40,000 megawatts (MW) despite utilizing less electricity.

"The consumers use 12,000-13,000MW of electricity but have to pay for a capacity of 40,000 MW," NTDC officials said during the National Electric Power Regulatory Authority (Nepra) public hearing in the federal capital.

The consumers are set to receive a nominal reduction in electricity prices of up to 31 paisa per unit on account of fuel adjustment for month of July 2024.

The Central Power Purchasing Agency (CPPA) had requested a reduction of 31 paisa per unit in the price of electricity. Consumers will get relief of Rs4.5 billion for the month of July, according to CPPA officials.

There was 4 per cent less electricity generated from hydel resources in July, CPPA officials noted, adding that during this period, more electricity was generated from imported coal.

The CPPA officials said global fuel prices are continuing to decline, noting that if economic indicators remain stable, electricity prices are expected to see only a slight adjustment.

"If the losses are removed, how much relief will be for consumers?" NEPRA member Rafiq Shaikh inquired.

The NTDC officials were unable to answer the question, which led Nepra members to express their displeasure over the lack of a response.

The NEPRA officials stated that energy growth has not increased in the last six years.

"What was the cost of reducing system losses, and how much burden did it place on consumers?" Shaikh asked.

Shaikh further called for an analysis to determine responsibility. "Electricity bills have now surpassed house rent costs. Reports indicate that house rents are rising due to higher electricity bills. Hearing this news, our heads are bowed in shame."

The Nepra concluded the hearing and reserved its decision. A final ruling will be issued following further examination of the data by the authority.

 

Quarterly Adjustments for April to June 2024

Meanwhile, consumers are going to face an increase in electricity rates of up to Rs1.89 per unit on account of quarterly adjustment.

The Nepra in a statement said that an application for the fourth quarter adjustment of the last fiscal year (2023-24) was submitted by the power distribution companies to it.

The authority conducted a hearing on this application on August 26, 2024. In the application, a total of Rs46.991 billion had been sought for the fourth quarter adjustment of the year 2023-24.

If this quarterly adjustment is applied to bills for September, October, and November, it will amount to Rs1.89 per unit, according to Nepra.

The third quarter adjustment of 2023-24, which is Rs0.93 per unit, is set to end in August. As a result, an increase of Rs0.96 per unit is expected in the September bills due to the quarterly adjustment.

The Nepra further said that a fuel price adjustment request for July 2024 was submitted by CPPA on behalf of electricity distribution companies to it on August 15, 2024.

The authority reviewed this application on August 28, 2024. The petition requests a reduction of Rs0.31 per unit, which will be reflected in September bills.

Consumers paid a fuel price adjustment of Rs2.56 per unit in August bills. As a result, a reduction of Rs2.87 per unit is expected in September bills due to the fuel price adjustment.

Combining the two adjustments, consumers are expected to receive a relief of Rs1.91 per unit in their September bills, according to Nepra.