Fuel cost adjustment: Discos, K-Electric seek hike in power tariff

ISLAMABAD: Power distribution companies, including Ex-WAPDA Discos and K-Electric, have sought an increase in power tariff on account of fuel charges adjustment (FCA) in August.

The Central Power Purchasing Agency (CPPA), representing Ex-WAPDA distribution companies (XWDiscos), sought Rs1.8846 per unit hike and K-Electric demanded Rs2.336 per unit increase for the units consumed in the month of June 2023.

The XWDiscos and K-Electric (KE) have submitted separate petitions to the National Electric Power Regulatory Authority (NEPRA) seeking a tariff increase. NEPRA has scheduled public hearings on July 26.

Discos would fetch over Rs29 billion (including GST) from the proposed hikes while KE would collect over Rs5 billion (including GST) from its customers.

According to the tariff mechanism, changes in fuel costs are passed on to consumers on a monthly basis through an automatic mechanism, while quarterly tariff adjustments account for variations in power purchase prices, capacity charges, variable operation and maintenance costs, use of system charges and the impact of transmission and distribution losses.

The CPPA petition stated that the distribution companies charged Rs7.5084 per unit on an account of fuel cost from their consumers in the month of June 2023 as compared to actual fuel cost amounted to Rs9.3930 per unit, and asked to pass on the difference of Rs1.8846 per unit to consumers.

In the data provided to the regulator, CPPA reported that 13,715 GWh of electricity was generated during the month, costing Rs132.08 billion (equivalent to Rs9.63/unit). It further stated that 13,327 GWh, costing Rs125.185 billion (or Rs9.393/unit), was delivered to the distribution companies (Discos), with transmission losses of 2.57 percent.

In June 2023, hydel generation reached 4,133 GWh (30.14 percent), surpassing the May 2023 figure of 3,312.2 GWh (26.96 percent).

According to the data, 10 GWh of expensive electricity was generated from High-Speed Diesel in June, with a generation cost of Rs30.4535 per unit.

Additionally, the data indicated that 744 GWh (5.43 percent) of costly electricity was generated from furnace oil in June at the rate of Rs26.0973 per unit. This represents a significant increase of 209 percent compared to May’s generation of 241 GWh (1.96 percent).

Furthermore, coal-based power plants saw an 18 percent increase in generation, reaching 2,434 GWh in June compared to 2,061.3 GWh in May. The cost of coal-based electricity during the month was Rs14.0477 per unit.

In June, natural gas-based generation contributed 1,171 GWh (8.54 percent) of electricity to the national grid, with a cost of Rs11.7444 per unit. RLNG-based electricity accounted for 2,544 GWh in June, with a cost of Rs24.0740 per unit. Nuclear power plants generated 1,857 GWh (13.54 percent) of electricity in June, with per unit cost of Rs1.0721.

The import of electricity from Iran amounted to 25 GWh, with a cost of Rs23.6329 per unit. Additionally, 66 GWh of electricity was generated from bagasse at a rate of Rs5.9822 per unit. Wind, solar, and mixed sources contributed 597 GWh, 105 GWh, and 27 GWh, respectively to the national grid during the month.