NEPRA Addresses Fuel Cost Adjustment for July Billing

On Wednesday, the National Electric Power Regulatory Authority (NEPRA) has finally held a public hearing over the FCA for July 2023 that is related to WAPDA’s Power Distribution Companies (DISCOs). This hearing was very important for testing of notifications of volatility in power tariffs influenced by cost of fuel used in electricity production.

Request For Reduction in Power Tariff

The petition can also be made with regards to the power tariff, asking for a reduction of the same.

The CPPA-G, representing the XWAPDA DISCOs, filed an application for a 31 paisa per unit cut in the power tariff for July. This reduction, if granted, will take effect on September bill The following chart illustrates the reduction available for approval:

In August billing cycle, consumers paid an additional Rs 2.56 per unit under the FCA. In September, there is a possibility of a reduction of Rs 2.87 per unit, with power generation companies offering an estimated Rs 1.91 per unit once the two adjustments have been made.

Relief to Consumers

As per the CPPA officials, the FCA reduction in July may lead up to Rs 5.5 billion in relief for the consumers. This comes as a result of various factors, including:This comes as a result of various factors, including:

Use of imported coal as a source of electricity production has gradually gone up.
The hydel power generation has reduced by 4%.
Decreased global fuel prices as a result of which costs of electricity generation were reduced.

Collectively, 14,880 GWH of electricity, which is equivalent to Rs 133,295 million were produced and out of the total, power amounting to 14,411 GWH was supplied to DISCOs at Rs 130,243 million.

Division of Electricity Generation Sources

During the specified period, electricity was generated from various sources as follows:

35.89% from hydroelectric power
10.12% from local coal
7.64% from imported coal
7.93% from gas
19.96% of it from RLNG (Re-Gasified Liquefied Natural Gas)
13.36% from nuclear power
2.99% from wind energy
0.69% from furnace oil

Provision for Quarterly Adjustment for fiscal Year 2023-24

Beside the above FCA hearing, WAPDA DISCOs has filed a petition for quarterly tariff adjustment for the fourth quarter for the fiscal year 2023-24. This petition was presented before NEPRA through a hearing conducted in the organization on the 26th of August 2023.

In these returns, DISCOs are asking for a power adjustment equalization of Rs 46.991 billion for the said quarter. If sanctioned, this adjustment would lead to another Re 1.89 per unit for consumers’ tariff, which will apply in billing months of September, October, and November. The previous quarterly adjustment of 93 paisa per unit, which was implemented in the third quarter, will come to an end in August.

The new quarterly adjustment envisages that consumers may face a possible 96 paisa per unit addition in the power tariff for September billing.

NEPRA’s Decision Awaited

This event has created confidence by NEPRA after considering all the grievances represented in the petition keenly. The verdict will be given after the analysis of the given statistics and data have been done.

FAQs

Q1. What is the Fuel Cost Adjustment (FCA)?

A1. The FCA considers the fluctuating costs of fuel for power generation and is a monthly-varying component of the consumers’ tariffs.

Q2. What kind of consumer release is expected for the September billing cycle?

A2. The consumers could also get a relief of Rs 1.91 unit, including FCA for July.

Q3. What is the proposed quarter increase in their DISCOs?

A3. WAPDA DISCOs to establish a Rs 46.991 billion adjustment for the fourth quarter of FY 2023-24, which gives Rs 1.991 billion adjustment for the fourth quarter of FY 2023-24, which will be Rs 1.47 per unit in the monthly average of August, an increment of 89 per unit occurred during the billing months of September, October, and November.

Q4. What percentage of the electricity generated by Pasni was through hydroelectric power?

A4. In the given period, 35 of the target clients were treated in the facility as indicated in the annual reports and records. Hydel power formed the major source of generation, where 89% of electricity was generated.