Power tariff goes down by Rs1.2 per unit

The National Electric Power Regulatory Authority (Nepra) on Wednesday asked the State-owned power distribution companies (DISCOs) to refund Rs1.228 per unit to the consumers in their bills for the month of February 2025, on account of the monthly fuel charges adjustments (FCA) for December 2024.

The decision was taken on a petition from the Central Power Purchasing Agency (CPPA), seeking permission to refund Rs1.0353 per unit. However, Nepra, after holding a public hearing on January 30, assessed a national average uniform decrease of Rs1.23 per unit in the applicable tariffs for DISCOs.

This downward adjustment would apply to all consumer categories, except the lifeline consumers, domestic consumers consuming up-to 300 units, electric vehicle charging stations (EVCS), pre-paid consumers in all categories, and the agriculture consumers of all the XWDISCOs.

The regulator also clarified that the negative adjustment on account of the monthly FCA was also applicable to the domestic consumers having Time of Use (ToU) meters, irrespective of their consumption level.

In its decision Nepra also clarified that if the electricity bills for February 2025 had already been issued before the official notification of its latest decision, the adjustment would be applied in the bills for the following month – March 2025.

Similarly, for K-Electric, the regulator approved a negative FCA of Rs1.23 per unit for November 2024, which would be reflected in bills for February 2025. If any February 2025 bills had been issued before the official notification, the adjustment would be applied in the following month.

The FCA for K-Electric was approved on a provisional basis and subjected to adjustment, once Nepra finalised the utility's Multi-Year Tariff (MYT) for 2024-30 period. Any cost differences arising from the MYT determination would be incorporated into the future adjustments, the regulator stated.

Nepra Member Tariff Mathar Niaz Rana in his additional note said that the regulator had approved a negative FCA of Rs1.23 per unit for the K-Electric's November 2024 billing, which was significantly lower than the Rs4.98 per kilowatt hour (kWh) requested by the utility.

NEPRA determined that K-Electric's actual FCA should be negative Rs5.00 per kWh, or Rs7.21 billion cumulatively, but withheld Rs5.44 billion pending scrutiny of Rs8.7 billion in costs related to part load, open cycle operations, degradation curves, and start-up costs under the K-Electric's MYT.

Some officials argued that the full FCA relief should be passed on to the consumers, as anticipated after the public hearing. Nepra would decide later whether to adjust the withheld amount upfront or stagger it over future FCA determinations.

Quarterly adjustment

Meanwhile, the consumers are also set to enjoy another relief because of the cut of up to Rs2 per unit in power tariff that amounts to Rs52 billion, on account of second quarterly adjustment for the ongoing financial year.

After holding a public hearing chaired by Nepra Chairman Waseem Mukhtar, the regulator hinted on Wednesday at directing DISCOs, including the K-Electric to refund over Rs52 billion to the electricity consumers under the second quarterly adjustment for the outgoing fiscal.

During the hearing, the regulator examined the key components of the adjustment, with officials highlighting that the major portion of the proposed relief stemmed from a reduction in the capacity payments.