FCA for Aug: Electricity consumers to get Re0.85/unit refund in Oct

• Cost of generation was low during Aug, declares Nepra.
• Member Tariff Rana concerned over significant rise in tariff.
• It will also not be applicable to pre-paid electricity consumers.

ISLAMABAD: Consumers who paid higher electricity rates in August 2024 will receive refunds of Re0.8555 per unit on their October bills, according to a statement from the National Electric Power Regulatory Authority (Nepra).

The power regulator took a decision to this effect after reaffirming in its latest ruling that the cost of power generation was low during August and consumers were charged higher prices, The News reported.

On September 26, the Nepra held a public hearing to make the decision in this regard. Then, it officially notified it on October 24. It should be noted that the Central Power Purchasing Agency (CPPA) petitioned Nepra seeking reduction of Re0.5755 per unit on account of fuel cost adjustment (FCA). The regulator has permitted a further release of Re0.8555 per unit to customers.

The Nepra said the decision will be applicable to all the consumer categories except lifeline consumers, domestic users using up to 300 units, agriculture consumers and Electric Vehicle Charging Stations (EVCS), consumers of all the power distribution companies (Discos) except consumers of K-Electric. It will also not be applicable to pre-paid electricity consumers of all categories who opted for pre-paid tariff.

In his note, Member Tariff Mathar Niaz Rana expressed concerns over the significant rise in the bagasse-based tariff, which exceeded local coal prices, sparking widespread consumer criticism. He highlighted that the bagasse tariff remained steady at Rs5.982 per kWh in June and July 2024 but sharply increased to Rs12.48 per kWh in August 2024, surpassing the local coal tariff, which rose more gradually from Rs11.03 per kWh in June to Rs12.27 per kWh in August 2024.

Rana pointed out that this substantial increase occurred without adequate consumer participation, leading to dissatisfaction. He referred to the Ministry of Energy’s earlier request to reconsider the bagasse tariff, which was dismissed on legal grounds, and argued that the ministry’s concerns, made in the public interest, should be reconsidered under the legal framework prior to the 2018 amendments to the Nepra Act.

Nepra’s other members, including the chairman, rebutted the Member (Tariff)’s claims regarding the rise in bagasse-based fuel costs, emphasizing that the increase from Rs5.98/kWh in July to Rs12.48/kWh in August 2024 was a result of long-delayed adjustments and should not be compared to local coal tariffs.