Electricity Bills For July Likely To Reduce Under Fuel Adjustment charges

The National Electric Power Regulatory Authority (NEPRA) has approved a reduction of 29 paise per unit in the monthly fuel cost adjustment (FCA).

According to the report, while presiding over the public hearing on the tariff petition of the Central Power Purchasing Agency (CPPA) on behalf of DISCOS, NEPRA Chairman Tauseef H. Farooqi said that during the docking, the regulator regarding the closure of the LNG terminal and the use of alternative expensive fuel for power generation was not taken into confidence.

The CPPA had requested the regulator to allow consumers a maximum refund of 12 paise per unit under the FCA mechanism in May 2021.

However, NEPRA officials pointed out that the reference fuel charge was Rs 5.9322 per unit as against Rs 5.6734 per unit, which is a difference of 26 paise.

Similarly, another deviation from the Economic Merit Order was identified which resulted in an additional burden of Rs. 354.29 million or about 3 paisa per unit.

Thus, NEPRA reduced by about 29 paise per unit, which has a total financial impact of Rs 3.60 billion.

However, in practice, only Rs 1.80 billion will be refunded to consumers as the reduction will not be allowed to those using less than 300 units and agricultural consumers on the ground that they are already benefiting from the subsidy.

The low cost of fuel will be adjusted in the billing month of July.

These rates will not apply to electric consumers.

During the hearing, NEPRA officials said that the power companies had run inefficient power plants in May and reported only 600 mmcfd of gas supply instead of 800 mmcfd for power generation. High costs should not be passed on to consumers due to inefficient power plants and system weaknesses.

The head of NEPRA expressed frustration over the recurring faults in the transmission system and wondered if the top officials of the National Transmission and Dispatch Company (NTDC) were asleep when the government was installing the power plant.

“When they were installing new power plants, why didn’t NTDC bring it to the notice of the government to upgrade the transmission system?” He asked.

The public hearing was informed that in May, the total energy production from all sources was recorded at 13,099 gigawatts per hour (GW) with a total value of Rs 74 billion per unit of Rs 5.7 and out of which about 12,678 gigawatts, Rs 5.8 per unit was delivered to DISCOS.