September's power tariff slashed by Rs1.28 per unit under FCA

• Reduction does not apply to power tariff regime of K-Electric.
• CPPA initially requested cut of 71 paisa per unit for September.
• Adjustment to be effective for domestic users with ToU meters.
  

The National Electric Power Regulatory Authority (NEPRA) has approved a Rs1.28 per unit reduction in electricity prices for September 2024 under the Fuel Charges Adjustment (FCA), a notification said on Wednesday.

This decision, effective in November’s billing cycle, provides relief to consumers as global fuel price fluctuations influence monthly power bills.

This adjustment does not apply to the power tariff regime of K-Electric, the sole electricity supplier in Karachi. 

The Central Power Purchasing Agency (CPPA) had initially requested a reduction of 71 paisa per unit for September, based on its data. However, after a detailed review and a public hearing on October 30, Nepra decided on a greater reduction of Rs1.28 per unit. 

This adjustment marks a more significant decrease than the 86 paisa cut in August, offering consumers an additional relief of 42 paisa per unit for September.

According to Nepra, this FCA reduction will apply to most consumer categories, except for lifeline customers, domestic consumers using up to 300 units, electric vehicle charging stations, prepaid customers, and agricultural connections. 

Nepra also confirmed that the adjustment will be effective for domestic users with Time of Use (ToU) meters, regardless of their consumption levels.

The FCA is a mechanism that adjusts electricity tariffs based on the fuel costs incurred by power producers. When fuel prices drop, consumers see a reduction in their electricity bills, while rising fuel prices lead to higher charges. 

For September, CPPA reported that a total of 12,487 gigawatt-hours (GWh) of electricity was generated at an average cost of Rs8.34 per unit, totalling Rs104.1 billion.

Nepra said that all concerned Distribution Companies (DISCOs) must follow court orders when implementing this FCA adjustment. The Authority also noted that DISCOs would reflect this reduction in November’s billing cycle for eligible consumers.