ISLAMABAD: Power distribution companies (Discos) have sought an additional Rs74 billion in May by charging consumers about Rs32bn as monthly fuel cost adjustment (FCA) and Rs42bn as quarterly tariff adjustments (QTAs).

The ex-Wapda power companies have filed a combined petition for the approval of additional FCA at a uniform rate of Rs3.16 per unit for electricity they sold to consumers in March to generate about Rs32bn. They have filed separate petitions for combined additional revenue of Rs41.98bn as QRA for October-December 2021.

The National Electric Power Regulatory Authority has called two separate public hearings on April 27 and 28 to examine if the demands for higher FCA and QTA by these Discos were justified.

The Central Power Purchasing Agency (CPPA), on behalf of all these Discos, has sought about 51pc increase in FCA to Rs9.4 per unit for electricity sold in March to generate about Rs32bn additional funds.

The CPPA has claimed that the consumers were charged a reference fuel cost of Rs6.23 per unit in March, but the actual cost turned out to be Rs9.4 per unit, hence an additional charge of about Rs3.16 per unit to consumers.

The higher electricity rates, once approved, would be charged to all consumers in the next billing month (May) except to those citizens using fewer than 50 units per month.

Fuel cost in March

According to Nepra’s data, the cost of fuel for electricity generation jumped 66.2pc year-on-year last month to Rs9.22 per unit.

The sharp increase in the overall fuel cost was partly because of a 388pc surge in international coal prices over the same period, according to Arif Habib Ltd.

One in every four units of electricity generated in March was obtained by burning coal. The per-unit cost of coal-based electricity amounted to Rs12.41, up 71pc from a year ago.

Similarly, the cost of power generated from imported gas went up 58pc on an annual basis to Rs14.37 per unit on the back 90pc increase in global gas prices. The share of imported gas was almost 19pc in total power production in March.

The cost of power generated from furnace oil increased 89pc year-on-year to Rs22.50 per unit. It was the most expensive fuel source last month. It had a 10.6pc share in total electricity production versus a 2.6pc share a year ago.

A decline of 2.1pc in hydel-based generation also contributed to the overall increase in the average fuel cost. Nuclear power plants helped curtail the overall generation cost as its per-unit rate stayed flat year-on-year at Re1. Its share in the power mix increased to 15pc from 10.5pc a year ago.

The share of wind power also increased from 1.9pc in March 2021 to 2.6pc last month while the contribution from bagasse, solar and others remained flat at 1pc, 0.7pc and 0.4pc, respectively. Electricity generated through local gas cost Rs7.80 per unit, slightly higher than a year ago. Its share in the power mix was 9.5pc versus 11.6pc in March 2021.

Total power generation rose 16.2pc year-on-year to 14,003 megawatts in March.

Published in Dawn, April 20th, 2022