ISLAMABAD: The power distribution companies (Discos) have sought an additional fuel cost adjustment (FCA) of Rs4.69 per unit to generate about another Rs64 billion in revenue on account of the higher cost of electricity consumed in July.

The National Electric Power Regulatory Authority (Nepra) has accepted the tariff petition for a public hearing fixed for Aug 31. The additional FCA demanded by Discos, previously managed by Wapda, for July is almost 53 per cent lower than that of a record Rs9.9 per unit for June because of a substantial increase in the share of cheaper domestic fuels, particularly low-cost sources like hydropower and nuclear power.

The Central Power Purchasing Agency (CPPA) — a subsidiary of the power division — sought the Rs4.69 monthly FCA on behalf of Discos for electricity sold to consumers in July. This will generate about Rs65bn in additional funds to Discos in the billing month of September. The extra cost adjustment is almost 75pc higher than the reference fuel cost charged by the power supply companies in July.

Data showed that about 64pc power generation came in July from cheaper domestic resources with static prices compared to a 51pc share in June. The share was 54pc in May, 50pc in April and 45pc in March.

If cost adjustment is approved, users will pay additional Rs4.69 per unit in September

The biggest contribution to the overall power grid came from hydropower, which has no fuel cost. Its share jumped to 35pc in July from 24pc in June and May.

Besides, the lower availability of imported and thus expensive RLNG, or regasified liquefied natural gas, came as a blessing in disguise for consumers.

The CPPA claimed that consumers were charged a reference fuel cost of Rs6.29 per unit in July, but the actual price turned out to be Rs10.98 per unit, hence an additional charge of about Rs4.69 per unit.

This extra rate, once approved, would be charged to all consumers in September, except to those using fewer than 50 units per month.

After hydropower, the second-biggest contribution of about 15pc in the overall power supply in July came from power plants running on imported RLNG; the percentage was significantly lower than 24.43pc in June and 23pc in May.

With the revival of the 1,100-megawatt K-2 nuclear power plant after a month-long closure for refuelling, the share of nuclear power also increased to 14.2pc in July from 9pc in June. Nuclear power had a 13pc share in May and 17.4pc in April.

The share of coal-based power plants was slightly lower at 12.7pc in July compared to 13.6pc in June and May. Coal-based electricity generation has come down from 16.7pc in April and 25pc in March because of low coal stocks amid the financial limitations of power producers and higher global prices.

In January and February, coal-based generation contributed 33pc and 32pc to the overall power generation.

The share of domestic gas in power generation stood almost unchanged at 10.4pc in July against 11pc in June and 10pc in May and April.

The share of power generated by the residual fuel oil stood at 6.2pc in July, significantly lower than 10.5pc in June thanks to higher production from nuclear and hydropower sources.

The cost of power generation from domestic gas rose to Rs9.96 per unit in July from Rs8.9 in June but was still lower than Rs10.12 per unit in May. The cost was Rs8.4 per unit in April and Rs7.75 per unit in March.

Three renewable energy sources — wind, bagasse and solar — together contributed about 4.45pc to July’s power generation compared to 7pc in June and 6.5pc in May. Wind and solar have no fuel cost, while that of bagasse was calculated at an unchanged Rs5.98 per unit.

The most expensive power generation — i.e. Rs35.7 per unit — in July came from plants running on furnace oil, slightly lower than Rs36.2 in June but higher than Rs33.67 in May, Rs28.2 in April and Rs22.52 in March.

The CPPA said a total of 14,151 gigawatt-hours (GWh) was generated in July at the cost of Rs151.55bn at the rate of Rs10.71 per unit, whereas net units delivered to Discos stood at 13,760 Gwh, costing Rs151.13bn at the rate of Rs10.98 per unit.

Published in Dawn, August 22nd, 2022