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- May 8, 2024
- Kainat Shakeel
- 0
As part of fuel cost adjustment (FCA) charges, ex-Wapda distribution companies (XWDiscos) were permitted by the National Electric Power Regulatory Authority (Nepra) on Wednesday to add a Rs2.83 per unit charge to customers’ energy bills for May. Nepra stated that the FCA is relevant to March. As to an official announcement from Nepra, a copy of which can be found on Dawn.com, the recent modification “shall apply to all the consumer categories excluding Electric Vehicle Charging Stations (EVCS) and lifeline consumers.” The email further stated that effective from March 1, this modification will appear on customers’ bills depending on the units billed.
The government requested permission from Nepra last month to charge customers an extra Rs23 billion in FCA for electricity used in March, even though 79% of power was generated using less expensive indigenous fuels. Customers were to be billed in May by the Central Power Purchasing Agency (CPPA), a division of the Power Division, for an additional fuel cost of Rs2.94 per unit. The pre-fixed fuel cost of Rs6.44 per unit that was already charged to customers in March was around 46 percent less than the planned extra FCA. This prompted concerns about the bureaucracy in the power industry’s ability to predict fuel prices, even for a period of six to seven months.
The extra FCAs have been between 50 and 115 percent greater in recent months than the pre-determined fuel prices that were announced at the beginning of the current fiscal year. This FCA came on top of a rise in the annual base price of almost 26% and an additional 10% increase under the current quarterly tariff adjustment, which is invoiced to consumers at a rate of Rs 2.75 per unit. As a result, even with reduced use habits, customers still pay high bills. Nepra had granted the request for an April 26 public hearing. Although the consumption of imported fuels like coal, diesel, and furnace oil remained zero, the higher projected FCA for March appears to be mostly caused by higher domestic coal and gas costs. LNG was comparatively less expensive, and the exchange rate remained stable.
The CPPA, in its capacity as Discos’ commercial agent, requested in a petition that the May bills include an extra FCA of Rs2.94 per unit for power used in March. While the real fuel cost increased to Rs9.38 per unit, the reference fuel cost for March was allegedly Rs6.44 per unit. It was roughly Rs9.42 per unit on average for petrol in February as well. There were 7,756 GWh of energy transferred to Discos at a cost of Rs72.67bn (at Rs9.38 per unit), out of the approximately 8,023 GWh of power generated in March at an anticipated fuel expense of Rs66.7bn (Rs8.3 per unit), according to the report. Reduced consumption patterns were evident in the data. Compared to the same month (8,459Gwh) the previous year, the consumption in March was likewise 8.3 percent lower.
The FCA for March sought this year was Rs2.94 per unit, more than twice as much as the FCA for the same month last year, which was Rs1.17 per unit. Nepra criticized the power companies in the hearing on April 26 for their inefficiency and usage of costly power plants when there were less expensive options available. However, Nepra also suggested that the firms might charge customers an additional Rs22.8 billion in May.