Nepra hints at Rs5.95/unit increase in April utility bill

ISLAMABAD: The National Electric Power Regulatory Authority (NEPRA) may allow the power distribution companies (Discos) to collect an additional Rs5.95/unit from the power consumers in their electricity bills of April 2022, as they paid less than the actual cost of power generation in January 2022.

Meanwhile, Hammad Azhar, federal minister for Energy (Power Division), in a tweet said: “On the instructions of the PM, fuel cost adjustments that have been incurred in electricity bills (due to rise in prices of imported fuels) since last few months to the tune of Rs 4-5/unit will be absorbed by the government henceforth for residential/commercial consumers.”

“Similarly, petrol/diesel prices will be reduced by Rs10/litre. This will be achieved by reducing PDL [Petroleum Development Levy] in the short-term but by a funded subsidy in the long term,” he added.

The power regulator in a public hearing on a petition filed by the Central Power Purchasing Agency (CPPA) on behalf of the Discos hinted to allow them up to Rs5.95/unit extra collection owing to costly imported fuel for power generation. This amount has been preliminary calculated based on the data the CPPA had submitted to the regulator. The Nepra will notify its final decision in a few days, which may vary from this figure. And this is not a tariff, but an additional collection for one month due to fuel price hike.

Nepra Chairman Tauseef H Farooqi chaired the public hearing while the authority’s members including Rehmatullah Baloch, Rafiq Ahmed Sheikh and Engineer Maqsood Anwar Khan were also present.

The CPPA has asked the authority for the monthly fuel cost adjustment (FCA) as it said that the fuel cost oil and RLNG were much higher than what was charged from the consumers. The total impact of the increase will be translated into an additional collection of around Rs 50 billion. The CPPA pleaded that it had charged the consumers a reference tariff of Rs6.5124 per unit in January 2022 while the actual fuel cost turned out to be more than the amount charged, and hence it should be allowed to increase the rate by Rs6.10 per unit.

According to the petition, the total energy generated in January was 8,797 GWh at a total price of Rs107.5 billion, which is Rs12.2199 per unit. Of the total, the net electricity delivered to the DISCOs was 8420.73 GWh with transmission losses of 330.85 GWh.

According to the data provided to the Nepra, the most expensive sources of energy generation including high-speed diesel (HSD) and residual fuel oil (RFO) were consumed more than in previous months, which also jacked up the total cost of generation while the least expensive (renewable) share reduced drastically during the month. Interestingly, the share of the RLNG-based power also reduced sizably.

The highest share of energy source in the total pie was of coal. The power generated from coal was 2,916.7 GWh (or 33.15pc) with a cost of Rs14.1049/unit. Its cost was also much higher due to price hike in the international market. It was followed by local natural gas and nuclear sources with 14.37 per cent (1264 GWh) each, while the gas charges were Rs7.747/unit.

The furnace-based electricity was generated of around 1238.11 GWh (14.07pc) with a unit cost of Rs22.807. The energy generated from imported RLNG was 626 GWh or 7.12 per cent of total generation with a cost of Rs16.703/unit. The HSD-based energy was generated of 592 GWh costing Rs25.98/unit. Interestingly, due to the normal water shortage in dams in the winter, the share of hydropower generation was only 512.94 GWh or 5.83 per cent in January.

From Iran, 31.65 GWh or 0.36 per cent electricity was imported at a cost of Rs 15.007 per unit. From wind and solar, 194.88 GWh and 46.58 GWh electricity were generated, respectively. From Bagasse, 107.13 GWh or 1.22 per cent electricity was generated at a cost of Rs 5.98 per unit. For the last several months, due to high imported fuel prices, the Nepra has been allowing the Discos to collect the additional amount from the power consumers.