Friday June 14, 2024

Discos seek extra Rs3.488/unit FCA in June bills

CPPA will justify its demand, and after that, the power regulator would make a final decision

By Israr Khan
May 21, 2024
A representational image of a transmission tower, also known as an electricity pylon. — AFP/File
A representational image of a transmission tower, also known as an electricity pylon. — AFP/File

ISLAMABAD: The ex-WAPDA Distribution Companies (XWDiscos) have requested approval from the National Electric Power Regulatory Authority (Nepra) to impose an additional charge of Rs3.488 per unit on power consumers in June 2024 bills.

The petition, filed by the Central Power Purchasing Agency (CPPA) on behalf of XWDiscos, is based on the monthly fuel charges adjustment (FCA) for April 2024. Nepra has accepted the petition and scheduled a public hearing for May 30, 2024, to finalise the decision.

The CPPA will justify its demand, and after that, the power regulator would make a final decision. If Nepra allows the additional charges, it would apply to all consumer categories except for electric vehicle charging stations (EVCS) and lifeline consumers of all DISCOs.

According to the data, furnished with the regulatory authority, the CPPA’s report indicated that a total of 8,639 GWh of electricity was generated in April 2024, with an associated cost of Rs79.55 billion (equivalent to Rs9.208 per unit). Moreover, 8,375GWh, originally priced at Rs75.205 billion was delivered to distribution companies (Discos), while transmission losses stood at 2.73 per cent. However, the petitioner has also decided to refund Rs3.06 billion (repay to the consumer), after that, the total amount goes down to Rs75.2 billion (or 8.98 per unit).

Power generation in April 2024 dropped by 13.7pc from the previous year and increased by 7.7pc from March 2024. The generation cost decreased 10.1pc to Rs9.2086 per unit YoY, but increased 10.8pc from March 2024.

Power generation figures reveal a 9.8pc reduction to 1,334 gigawatt-hours (GWh) from local coal and a 48pc cut to 336 GWh from imported coal in October 2023 compared to the previous month.

In April 2024, the government notably produced less electricity from renewable and cost-effective sources compared to the previous month. Had these resources been utilised, the costs would have further decreased, benefiting consumers with lower payments.

The petition outlines that in April, the consumers were charged a reference fuel cost of Rs5.4918 per unit, while the actual fuel cost incurred was Rs8.9801 per unit. The CPPA argues that the additional cost burden of Rs3.4883 per unit should be transferred to consumers.

In April 2024, hydropower generation increased by 10.6pc, while coal (local and imported)-based generation declined by over 50pc. Natural gas-based power generation fell by 18pc, RLNG-based generation down by 10.8pc, while nuclear power saw an increase of 6.6pc over the same month of last year. No electricity was generated from the high-speed diesel and furnace oil.

Nepra recently allowed XWDISCOs to collect Rs2.837 per unit from consumers in May 2024 bills on account of FCA for March 2024.

On account of the February FCA, distribution companies were allowed Rs4.921 per unit from consumers in April 2024 bills. Notably, in its decision for February 2024 FCA, the regulator noted with concern that the overall demand had reduced by around 12pc till February 2024 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.

Likewise, the power regulatory authority had permitted Rs7.05 per unit additional collection from power consumers for January 2024 FCA in March bills.