ISLAMABAD: Having already charged 20 per cent higher fuel cost over last year, the public sector power companies have sought about 70 paise per unit negative fuel price adjustment (FCA) in upcoming bills to refund about Rs8.5 billion overcharged in September.

This will be the third straight month that FCAs remain negative, mainly because of substantial fuel allowances allowed by the National Electric Power Regulatory Authority (Nepra) through a 20pc increase in base tariff effective July 1 to June 30, 2025. Almost 74pc of the total power supply flowed from domestic fuel sources during in September, more than half at zero fuel cost.

Last month, the regulator conducted a public hearing for 57 paise per unit negative FCA adjustment for August consumption but has not been able to notify the tariff cut for almost a month. However, since the FCA is only for one month, the 70 paise relief for September is estimated to be more or less at the same level (70-75 paise per unit) — resulting in any significant impact to consumers.

The power companies have claimed in their petitions that average fuel amounted to Rs9.1 per unit in September compared to Rs7.62 per unit of same month last year, showing an increase of almost 20pc. The said the power consumption was almost 6pc lower than last September.

Electricity demand shrinks 20pc on highest-ever tariff

Nepra has called a public hearing on Oct 30 to take up the petition filed by Central Power Purchasing Agency (CPPA) — a subsidiary of the Power Division — seeking “a decrease of Rs0.705 per kWh over the reference fuel charge of Rs9.8006 per unit”. The CPPA said the power companies had charged Rs9.8 per unit in fuel cost in September, which turned out to be Rs9.09 per unit.

In a petition, the CPPA, acting as commercial agent of the Discos, proposed that 70 paise per unit negative FCA should be adjusted to consumer bills in November for electricity consumed in September. It claimed that the reference fuel cost for September was set at Rs9.8 per unit, but the actual fuel cost turned out to be Rs9.09 per unit.

It said that about 12,487 gigawatt-hours (GWh) of electricity was generated at an estimated fuel expenditure of Rs104bn (Rs8.34 per unit) in September, of which 12,118 GWh energy was delivered to Discos for Rs110.2bn (at Rs9.09 per unit).

The data showed a major fall in power demand was due to record tariffs and the shrinking purchasing power of the consumers. The consumption in September was almost 20pc lower than the same month (12,920 Gwh) last year. The per unit fuel cost in September last year was reported at Rs7.62 per unit against Rs9.09 this year.

The biggest share of the total power supply came from hydroelectric at 39pc compared to its 37.5pc last year. Hydropower has no fuel cost. The second biggest share in the national grid came from LNG-based power at about 16.3pc, followed by nuclear at about 13pc, which was more than 17pc in the same month last year.

The coal-based generation supply amounted to about 19.3pc of the total, including local coal share 10.1pc and imported coal at 9.2pc. This was followed by 7.91pc contribution from local gas.

In August, the LNG-based power generation cost stood at Rs24.96 per unit, followed by Rs16.6 per unit for imported coal and Rs12.29 per unit for local coal. Furnace oil-based generation cost was Rs30.3 per unit, but its contribution was just 0.3pc in the overall power supply.

On the other hand, the cost of local gas-based generation stood at Rs13.67 per unit, and nuclear fuel cost amounted to Rs1.54 per unit.

Published in Dawn, October 23th, 2024