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Friday May 24, 2024

Nepra allows power firms to charge Rs4.92/unit hike

Nepra said the increase in the power price would apply to all consumer categories except for electric vehicle charging stations

By Israr Khan
April 09, 2024
National Electric Power Regulatory Authority (Nepra). — APP/File
National Electric Power Regulatory Authority (Nepra). — APP/File

ISLAMABAD: The National Electric Power Regulatory Authority (Nepra) Monday allowed ex-Wapda power distribution companies (XWDISCOs) to make a whopping Rs4.921 per unit additional collection from consumers in their April 2024 bills.

In February, they paid less than what was cost of power generation, especially from costly imported fuel. Notably, on March 28, Nepra held a public hearing on a petition of the Central Power Purchasing Agency (CPPA-G) on behalf of XWDISCOs. It had requested Rs4.99/unit positive fuel charges adjustments (FCA) for February 2024.

In its decision released on Monday, Nepra said the increase in the power price would apply to all consumer categories except for electric vehicle charging stations (EVCS) and lifeline consumers of all DISCOs. The said adjustment would be shown separately in bills based on units billed in the month of February.

The Authority noted with concern that demand has continuously been declining and till February 2024, the overall demand has been reduced by around 12 per cent as compared to the reference projections assumed in tariff. This decrease in sales would consequently result in higher quarterly adjustments, leading to further increases in tariffs.

The Authority, therefore, directed the CPPA-G and the Ministry of Energy to analyse the impact of lifting commercial-based loadshedding on the demand side and submit an intelligent proposal to the Authority to improve the demand. It was also highlighted that currently, over 60 per cent of the tariff consists of capacity charges, which is much higher as compared to international standards. The Authority accordingly asked the CPPA-G to evaluate the possibilities of reducing capacity charges while remaining within the legal framework.

The Authority further noted that wind-based power plants are being curtailed leading to NPMV Non-Project Missed Volume (NPMV) and expensive imported fuel-based power plants being operated.

It was also observed that Guddu power plant was operated on a 45 per cent plant factor on open cycle instead of a combined cycle, had this plant been operated on the combined cycle, it would have reduced the cost of generation.

It is to be noted that in February 2024, Pakistan’s power generation totalled 7,130 GWh for Rs61.996 billion, with transmission losses at 3.16 per cent. This marked an 8.07 per cent decrease from the previous year and a 14.24 per cent drop from January 2024. Generation cost rose by 8.52 per cent from Feb 2023 to Rs8.695 per unit, but fell 37 per cent from January 2024.

Costs for coal, gas, and RLNG decreased compared to the previous month. Nuclear generation declined by 3.93 per cent from January 2024.

RLNG-based generation stood at 1,450 GWh, with a per-unit cost of Rs22.026, down 9.3 per cent from the previous month. No power was generated from expensive sources like RFO and diesel.