Nepra hints at Rs5.95 per unit increase in April electricity bill

ISLAMABAD: The National Electric Power Regulatory Authority (NEPRA) may allow power distribution companies (Discos) to charge power consumers an extra Rs5.95 per unit on their April 2022 electricity bills if they paid less than the real cost of power generated in January 2022, The News reported.

Meanwhile, Hammad Azhar, federal minister for energy (Power Division), said in a tweet: "On the instructions of the Prime Minister, fuel cost adjustments of Rs 4-5 per unit that have been incurred in electricity bills over the last few months (due to the increase in the price of imported fuels) will be absorbed by the government going forward for residential/commercial consumers."

"Similarly, petrol/diesel prices will be reduced by Rs10/litre. This will be achieved by reducing PDL [Petroleum Development Levy] in the short-term but by a funded subsidy in the long term," he added.

At a public hearing on a petition filed by the Central Power Purchasing Agency (CPPA) on behalf of the Discos, the power regulator hinted at allowing them up to Rs5.95 per unit extra collection owing to the costly imported fuel for power generation. This amount has been preliminary calculated based on the data the CPPA submitted to the regulator.

The Nepra will issue its final decision in a few days, which may differ from this estimate. And this is not a tariff, but an additional collection for one month due to the fuel price hike.

Nepra Chairman Tauseef H Farooqi chaired the public hearing while the authority’s members, including Rehmatullah Baloch, Rafiq Ahmed Sheikh, and Engineer Maqsood Anwar Khan, were also present.

The CPPA has asked the authorities for the monthly fuel cost adjustment (FCA) as it said that the fuel costs for oil and RLNG were much higher than what the consumers were charged. The total impact of the increase will be translated into an additional collection of around Rs 50 billion. The CPPA pleaded that it had charged the consumers a reference tariff of Rs6.5124 per unit in January 2022, while the actual fuel cost turned out to be more than the amount charged, and hence it should be allowed to increase the rate by Rs6.10 per unit.

According to the petition, the total energy generated in January was 8,797 GWh at a total price of Rs107.5 billion, which is Rs12.2199 per unit. Of the total, the net electricity delivered to the Discos was 8420.73 GWh, with transmission losses of 330.85 GWh.

According to Nepra data, the most expensive sources of energy generation, such as high-speed diesel (HSD) and residual fuel oil (RFO), were consumed more than in previous months, raising the total cost of generation, while the least expensive (renewable) share was drastically reduced during the month. Interestingly, the share of RLNG-based power has also shrunk significantly.

The highest share of energy sources in the total pie was coal. The power generated from coal was 2,916.7 GWh (or 33.15pc) at a cost of Rs14.1049/unit. Its cost was also much higher due to the price hike in the international market. It was followed by local natural gas and nuclear sources with 14.37 per cent (1264 GWh) each, while the gas charges were Rs7.747/unit.

The furnace-based electricity was generated at around 1238.11 GWh (14.07pc) with a unit cost of Rs22.807. The energy generated from imported RLNG was 626 GWh, or 7.12 percent of total generation, at a cost of Rs16.703/unit. The HSD-based energy was generated at a cost of Rs 25.98/unit. Interestingly, due to the normal water shortage in dams in the winter, the share of hydropower generation was only 512.94 GWh or 5.83 percent, in January.

From Iran, 31.65 GWh or 0.36 per cent, electricity was imported at a cost of Rs 15.007 per unit. From wind and solar, 194.88 GWh and 46.58 GWh electricity were generated, respectively. From Bagasse, 107.13 GWh or 1.22 per cent of electricity was generated at a cost of Rs 5.98 per unit. Due to high imported fuel prices, the Nepra has been allowing the Discos to collect the additional amount from the power consumers.

Originally published in The News