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Thursday February 29, 2024

FCA for Oct: Nepra may allow additional Rs3.53/unit in Dec bills

People may face another financial strain in December 2023 bills as the government intends to collect around Rs40 billion (including GST) from power consumers on account of monthly fuel charges adjustments (FCA) for October 2023

By Our Correspondent
November 30, 2023
Image of NEPRA building — Facebook/File
Image of NEPRA building — Facebook/File

ISLAMABAD: The people may face another financial strain in December 2023 bills as the government intends to collect around Rs40 billion (including GST) from power consumers on account of monthly fuel charges adjustments (FCA) for October 2023.

To this effect, Nepra on Wednesday hinted at allowing the state-run power distribution companies (DISCOs) to collect an additional Rs3.53/unit from power consumers in the coming month’s bill.

The power regulator held a public hearing on the petition for Discos. Nepra Chairman Waseem Mukhtar headed the proceedings while the authority’s members including Mathar Niaz Rana (member Balochistan), Eng Maqsood Anwar Khan (KP), Amina Ahmed (Punjab), and Rafique Ahmad Shaikh (Sindh) were in the presence.

Although the authority has reserved its decision, if this demand per unit increase was accepted, then it would translate into nearly Rs40 billion in an additional collection in one month. Notably, over 70 percent (Rs28.325 billion) of the collection claims are pertaining to previous adjustments.

In October 2023, the government notably produced less electricity from renewable and cost-effective sources compared to the same month last year. Had these resources been utilized, the costs would have further decreased, benefiting consumers with lower payments.

The Authority expressed concern over the violation of the Economic Merit Order (EMO), as the expensive generation was made from inefficient plants.

The Central Power Purchasing Agency (CPPA), representing the Discos, asserted in their petition that the proposed per-unit FCA increase would impact power consumers using up to 200 units, with a modest rise of only Rs650 in their bills.

Data provided by the Central Power Purchasing Agency (CPPA) indicated that a total of 9,572GWh of electricity was generated in October 2023, incurring a cost of Rs79.07 billion (equivalent to Rs8.2605 per unit). However, when factoring in additional claims, the total amount increased to Rs105.737 (or 11.4277 per unit).

In October 2023, the per-unit generation cost of local coal rose sharply by 59 percent, reaching Rs12.104 from Rs7.622 in September 2023. Conversely, the per-unit generation cost of imported coal witnessed a decrease of 15.96 percent, falling to Rs13.27 from Rs15.789 in September 2023. Power generation figures for October revealed a 9.8 percent reduction to 1,334GWh from local coal and a substantial 48 percent cut to 336GWh from imported coal compared to the previous month.

Power generation in October 2023 experienced a 13.56 percent YoY decrease and a 28.2 percent decline from September 2023. Various energy sources saw fluctuations, with a marginal reduction in hydropower, a notable decline of 17.2 percent in nuclear power, a 3.9 percent decrease in solar power, and a 14 percent drop in wind power compared to October 2022. Natural gas-based generation in October 2023 was reduced by 30 percent to 704GWh over the previous month, costing Rs13.606 per unit, while no electricity was generated from high-speed diesel and furnace oil.