The Nepra trial envisages a burden of Rs23b

The Nepra trial envisages a burden of Rs23b

Power consumers may face an additional financial burden of about Rs23 billion as the National Electric Power Regulatory Authority (NEPRA) has completed hearings on requests for Fuel Charge Adjustment (FCA) for electricity consumed in March 2024. Although NEPRA has reserved its decision on the FCA for March 2024 sought by power distribution companies (DISCOs), it is expected that the power regulator will follow the past practice and approve the collection of Rs23 billion from already burdened electricity consumers through May 2024 electricity bills.

According to NEPRA, the authority will issue a detailed decision after carefully examining the facts and figures.

Earlier, the Central Power Purchase Agency (CPPA) submitted an application to the power regulatory authority on DISCO’s request to increase the electricity price by Rs2.9402 per kilowatt hour (kWh) under the fuel charge adjustment for March 2024. After that, NEPRA called a hearing public on April 26, 2024.

NEPRA Chairman, Waseem Mukhtar, while presiding over the hearing on FCA for March 2024, noted a consistent decline in electricity demand. During the hearing, NEPRA members from Sindh emphasized on the shift of consumers to solar electricity due to the high cost of conventional electricity. Additionally, officials from the National Power Control Center (NPCC) reported a 7.5% drop in energy demand in March 2024. Over the year, domestic consumer demand fell by 11.3%, and demand in the industrial sector by 4.5%, according to CPPA officials.

NEPRA officials pointed out that power consumers could have saved Rs58 crore if electricity had been generated through the Guddu Combine Power Plant. In response, the NEPRA member from Sindh emphasized that NEPRA has received many complaints regarding the violation of economic merit orders of power plants and assured that NEPRA is reviewing these complaints.

Officials from the National Transmission and Transmission Company (NTDC) informed NEPRA that electricity demand decreased by 7% in March 2024.

CPPA, in its application, claimed that the total electricity generated with various fuels in March 2024 was recorded at 8,023 GWh, at Rs8.3109 per unit. Total energy cost is Rs66,680 million.

According to the breakdown, power generation with hydel resources is 2,217 GWh, constituting 27.63% with zero cost of power generation, while power production with coal power plants is 862 GWh (local coal) and the total power generated for Rs14, 459 million (Rs16. 7779/unit). Similarly, power generated from gas-based power plants was 795 GWh, 9.91% of total generation, amounting to Rs13.6857 per unit, and generation from Regasified Liquefied Natural Gas (RLNG) was 1,658 GWh, i.e. 20.67% of total generation, at Rs22.1917 per unit. Similarly, energy production from bagasse was recorded at 78 GWh, the price of which has been calculated at Rs5.9822 per unit. Electricity generated from wind was recorded at 205 GWh, 2.55% of total generation, and solar at 110 GWh, 1.37% of total generation in March 2024. Additionally, electricity generation from nuclear sources was 2,070 GWh, which came out at Rs1. 5488 per unit, 25.79% of the total generation, and electricity imported from Iran is 28 GWh which amounts to Rs30.3729 per unit, 0.35% of the total power generation in March 2024.

It was also noted from the data submitted by CPPA to NEPRA that the net electricity delivered to DISCOs in March 2024 was 7,756 GWh (96.67%) at the rate of Rs9.3819 per unit, with a total cost of Rs72,764 million.

It should be noted that the monthly fuel charge adjustment will apply to all DISCO users except K-Electric users, lifeline users and electric vehicle charging stations. Furthermore, in the February adjustment, NEPRA increased the electricity price by Rs4.92 per unit, while in the January fuel charge adjustment, the price was increased by Rs7.6 per unit.