Nepra grants FCA relief to millions after decade

ISLAMABAD: In a major relief, National Electric Power Regulatory Authority (NEPRA) on Thursday approved applicability of negative fuel charge adjustments (FCA) for domestic consumers using up to 300 units per month and agricultural users, including those of K-Electric, after nearly a decade of exclusion since 2015.

The decision follows a formal request from the Ministry of Energy (Power Division) on Feb. 26, urging Nepra to reconsider its long-standing policy. The ministry highlighted that the current framework, in place since 2015, prevents certain consumer categories from benefiting when fuel costs decrease. Nepra’s decision in June 2015 had exempted non-Time of Use (ToU) domestic consumers using up to 300 units from negative FCA adjustments. Agricultural consumers had been excluded from the relief since November 2010.

In its latest decision, Nepra said, “The Authority understands that after the recent rebasing of tariff and through re-targeting of power subsidies, resulting in the creation of a protected tariff category, the quantum of subsidy for the non-protected residential and agricultural consumers has been significantly reduced.” It further stated, “In view thereof, and keeping in view the submissions of the MoE, the Authority has decided to pass on the negative FCA to all non-protected residential consumers and agricultural consumers as well.”

The government claims that since June 2024, household power tariffs have decreased by Rs4 per unit, providing relief to consumers. However, as this relief is only passed on through the FCA mechanism, households using less than 300 units had been unable to benefit. With Nepra’s latest decision, these consumers are expected to see reductions in their electricity bills in the coming months, particularly during the summer, when revised agreements with independent power producers take effect.

On Thursday, NEPRA directed ex-WAPDA distribution companies (XWDISCOs) and K-Electric to refund Rs2.124 per unit and Rs3.0 per unit, respectively, to consumers in March 2025 electricity bills. The decision follows monthly fuel charges adjustments (FCA) for December 2025 for K-Electric and January 2021 for XWDISCOs. Initially, K-Electric had proposed a refund of Rs4.95 per unit, while XWDISCOs suggested Rs2.0 per unit.

These decisions shall be applicable to all the consumer categories (including up to 300 units) except lifeline consumers, domestic protected consumers, Electric Vehicle Charging Stations (EVCS) and prepaid electricity consumers of all categories who opted for pre-paid tariff.

The interesting aspect of the decisions is that NEPRA directed state-run power firms to refund more while allowing K-Electric to return less than it had proposed under the monthly fuel charges adjustments. This marks the second consecutive month Karachi consumers received reduced relief. Last month, NEPRA approved only Rs1.23 per unit in refunds, despite K-Electric’s offer of Rs4.98 per unit. Notably, NEPRA’s member tariff, in an additional note, highlighted that KE’s actual FCA for that month (November) was a negative Rs5.0029 per unit.