Nepra approves electricity price hike by Rs1.6 per unit

ISLAMABAD: The National Electric Power Regulatory Authority (Nepra) has approved the increase in the price of electricity by Rs1.6 per unit, it emerged on Wednesday.

The decision was taken during a meeting held by the authority to discuss fuel price adjustment for the months of October and November, per sources.

In the case of fuel price adjustment for October, electricity prices will be increased by Rs0.29 per unit. As for November's fuel price adjustment, the increase in electricity price will be by Rs0.77 per unit.

The increase in the price of electricity will impose an additional burden of Rs8.40 billion on consumers. On December 14, NEPRA had approved a per unit hike of Rs1.11 in the power tariff as fuel readjustment "on account of variations in the fuel charges for the month of September 2020."

The authority had said that the increase will be collected along with the electricity bills for the month of December. The hike, however, was not applicable to the electricity prices charged by K- Electric.

Earlier, the National Electric Power Regulatory Authority (Nepra) on Wednesday reserved its decision on power distribution companies’ (Discos) petition seeking permission to allow it recover Rs1.5294 per unit extra fuel charges from the power consumers.

Under its routine feature, every month the Central Power Purchasing Agency (CPPA) on behalf of ex-Wapda distribution companies (Discos) submits details of power sale-purchase to Nepra which then holds a public hearing on it. After this, Nepra gives its decision on it under fuel price adjustment for each month.

On Wednesday, Nepra held a public hearing on the petition of the CPPA that sought upward adjustment for two months (October-November 2020). The agency pleaded that power distribution companies (Discos) may be allowed to charge Re0.5712 per unit extra from consumers for October and another Re0.9582 per unit for November in their next electricity bills, arguing that the cost of generation was high, while it sold the electricity at a lower price to consumers. They sought two-month combined increase of Rs1.5294/unit.

After calculating the statistics of CCPA regarding power it purchased from the generators and its selling to the power consumers, during the hearing, it came to the conclusion that Rs1.06 per unit increase shall be justified (October Re0.29 per unit and Re0.77 per unit for November). Its combined impact shall be Rs8.4 billion. This amount shall be collected from the power consumers.

An official of the authority said that it has calculated this increase which is to be allowed most probably to Discos. “We have taken no decision on it; however, will issue our final decision in a few days,” he said. He however said that the final decision shall be around Rs1.06 per unit.

The regulator again expressed concern over the use of furnace oil for power generation. “The CPPA informed us that around Rs15 billion have been deducted for FO-based power generation. It also suggested that if the government does not want to run the furnace-based power generators, then it should take them out of the economic merit order and close them once and for all,” said the official.

In October, against the demand of 650 mmcfd gas, 627 mmcfd was supplied to plants. Due to a shortage of LNG, plants were being run on furnace oil. The Nepra vice chairman said that they are in support of loadshedding as it affects the domestic, commercial and industrial consumers.