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Nepra likely to allow Discos to charge Rs1.61/unit more

By Israr Khan
June 01, 2023

ISLAMABAD: The National Electric Power Regulatory Authority (Nepra) Wednesday hinted at allowing the state-run power distribution companies (discos) to collect an additional Rs1.6076/unit, while the K-Electric was directed to reimburse a meager Rs0.0472/unit to the consumers in June bills.This preliminary calculation was expressed in a public hearing on these companies’ petitions on account of their monthly fuel charges adjustments (FCAs) for April 2023.

It is to be noted that the discos had asked for permission to collect Rs2.01/unit, while the Karachi-based utility sought Nepra’s permission for an additional collection of Rs0.489/unit in June 2023 bills.The K-Electric had also asked for adjustment of Rs5.17/unit for the quarter ending March 2023 (Jan–Mar 2023). However, the regulator reserved its judgment on it.

The power regulator held public hearings which were presided over by the Nepra Chairman Tauseef H. Farooqi, while member (Licensing), Engr. Maqsood Anwar Khan, member (technical & finance), Mathar Niaz Rana, and member (Law) Ms. Amina Ahmed were present.

The Central Power Purchasing Agency Guarantee Limited (CPPA-G) on behalf of Discos and K-Electric had sought Nepra’s nod for transfer of an additional burden of Rs43 billion to the consumers on account of monthly fuel cost and quarterly adjustments.During the hearing on K-Electric’s FCA petition for April, an official from Nepra revealed that in April 2023, K-Electric generated electricity at a cost of Rs23.03 per unit from its own resources. In contrast, the cost of electricity received from the national grid was Rs10.47 per unit, the official added.

After calculation, the regulator preliminarily concluded that around 0.05/unit concession be given to consumers.This adjustment/relief would be available to all user categories of KE except lifeline power consumers, domestic consumers consuming up to 300 units, agricultural consumers and electric vehicle charging stations (EVCS).

This is also applicable to domestic consumers having Time of Use (ToU) meters irrespective of their consumption level. The Authority will decide the matter after due diligence and considering the comments of all stakeholders. It will issue its final decisions in a few days.

If Nepra issues its decisions with the same per unit changes, then the discos will collect Rs15.626 billion more in June, while the K-Electric will return Rs72 million to its clients.

Under the tariff mechanism, changes in fuel cost are passed on to the consumers only on a monthly basis through an automatic mechanism, while quarterly tariff adjustments on account of variation in the power purchase price, capacity charges, variable operation, and maintenance costs, use of system charges, including the impact transmission and distribution losses, are built in the base tariff by the federal government.During the hearing on the quarterly adjustment of Rs5.170/unit, the regulator noted that despite the completion why one unit of Bin Qasim Power Plant remained closed and why did the LNG unit of the power plant remain closed.

The Nepra chairman expressed displeasure over the shutdown of one unit of Bin Qasim Power Plant and directed the K-Electric to submit a detailed report on the matter.

The Nepra has reserved the judgment on the quarterly adjustment. The hike of Rs5.170/unit, on the account of quarterly adjustments, will burden the KE’s consumers with Rs18.3 billion payable in three months.