In a recent public hearing conducted by the National Electric Power Regulatory Authority (Nepra), discussions were held regarding the monthly fuel charges adjustments (FCAs) for April 2023. Nepra has hinted at allowing the state-run power distribution companies (discos) to collect an extra Rs1.6076/unit from consumers, while directing the K-Electric to reimburse a meager Rs0.0472/unit. Let’s delve into the details of these developments and their potential impact on the energy sector.
Discos Seek Additional Collection, Nepra Considers Lower Amount
The power distribution companies (discos) had initially requested permission to collect Rs2.01/unit from consumers in their June 2023 bills. However, Nepra has indicated that they might allow a reduced amount of Rs1.6076/unit. This adjustment in the collection amount stems from the monthly fuel cost variations experienced by these companies.
K-Electric’s Request and Nepra’s Judgment
In the same hearing, the Karachi-based utility, K-Electric, sought Nepra’s permission for an additional collection of Rs0.489/unit in June 2023 bills. However, Nepra has reserved its judgment on this matter, and the final decision is yet to be announced. Additionally, K-Electric also requested an adjustment of Rs5.17/unit for the quarter ending March 2023. The regulator is closely examining this request and expects a detailed report from K-Electric regarding the closure of one unit of the Bin Qasim Power Plant and the LNG unit of the power plant.
Public Hearing Details and Nepra’s Chairman
The public hearings on these petitions were presided over by Nepra Chairman Tauseef H. Farooqi, with Engr. Maqsood Anwar Khan, Mathar Niaz Rana, and Ms. Amina Ahmed also present. The Central Power Purchasing Agency Guarantee Limited (CPPA-G), representing both the discos and K-Electric, sought Nepra’s approval for transferring an additional burden of Rs43 billion to consumers. This burden is associated with the monthly fuel cost and quarterly adjustments.
Potential Relief for Consumers
During the hearing on K-Electric’s FCA petition for April, Nepra officials revealed that K-Electric generated electricity at a cost of Rs23.03 per unit from its own resources, whereas the cost of electricity received from the national grid was Rs10.47 per unit. Based on these calculations, Nepra has preliminarily determined that consumers should be given a concession of around 0.05/unit. This relief will be available to all user categories of K-Electric except lifeline power consumers, domestic consumers consuming up to 300 units, agricultural consumers, and electric vehicle charging stations (EVCS). Domestic consumers with Time of Use (ToU) meters, regardless of their consumption level, will also benefit from this relief. Nepra will make a final decision after considering the comments of all stakeholders.
Potential Financial Impact
If Nepra’s decisions are issued with the same per unit changes, the discos will collect an additional Rs15.626 billion in June, while K-Electric will return Rs72 million to its clients. The quarterly adjustment of Rs5.170/unit, if approved, will burden K-Electric consumers with Rs18.3 billion payable over three months.
The National Electric Power Regulatory Authority (Nepra) is carefully considering the requests of power distribution companies (discos) and K-Electric for additional collections and adjustments.