ISLAMABAD: The National Electric Power Regulatory Authority (Nepra) on Tuesday notified an additional fuel cost adjustment (FCA) of Rs3.08 per unit for consumers of ex-Wapda distribution companies (Discos) with a net financial impact of about Rs28.5 billion for electricity consumed in October.

According to Nepra’s notification, the adjustment will apply to all the consumer categories except Electric Vehicle Charging Stations (EVCS) and lifeline consumers and will be separately in December’s bill.

Click to see more

The Central Power Purchasing Agency (CPPA), on behalf of ex-Wapda Discos, had demanded Rs3.55 per unit additional FCA for October to raise about Rs32.7bn. It claimed that the consumers had been charged at a reference fuel cost of Rs7.8938 per unit, but the actual cost turned out to be Rs11.43 per unit.

Discos to extract Rs28.5bn more despite producing 76pc power from cheaper fuels

Power firms are seeking the additional FCA despite a healthy 76pc electricity generation from cheaper domestic fuels on top of about 26pc (Rs7.5 per unit) increase in annual base tariff and about 18pc (Rs3.28) hike under quarterly tariff adjustment currently in place.

This means the electricity consumers are unable to feel a sigh of relief because of lower consumption month of December as they would be charged such a big FCA on relatively higher units consumed in October.

This is mainly because of about Rs28bn claimed by the CPPA for previous adjustments resulting in an additional cost of Rs2.95 per unit, instead of just 59 paise on account of generation cost in October.

Click to see more

The Rs25.4bn impact was because of a revision in fuel cost adjustment of the Thar Coal Block-1 project for six months — February to July — already approved by Nepra on Oct 19. The regulator, however, withheld Rs3.2bn another similar adjustment for China Hub Power for verification of evidence and details.

The hydropower generation contributed about 32.54pc to the national grid in October, down from about 37.6pc in August and September. Hydropower has no fuel cost.

On the other hand, LNG-based power generation increased to 20.25pc in October to graduate to the second position against its 16pc share and third position in September.

Nuclear power contributed 19pc share to the grid but fell to third position in October in place of LNG, although it had contributed 17pc to the national grid in September.

This was followed by local coal-based generation that stood at about 14pc in October instead of 11.08pc share in September. The share of imported fuel also dropped to 3.5pc in October when compared to 4.83pc September. The total share of coal-based power generation (both local and imported) increased to 17.5pc in October against 16pc in September.

Power supply from domestic gas maintained its downward journey and contributed just 7.35pc share to the grid in October against 7.54pc in September when compared to 7.6pc in July and August.

The fuel cost of furnace oil-based power generation increased further increased to Rs38.7 per unit in October against Rs37 in September, Rs33.32 per unit in August and Rs28.7 in July. However, furnace oil-based generation was negligible.

The LNG-based power generation cost in October slightly came down to Rs23.7 per unit against Rs24.2 in September. The cost of power generation from domestic gas slightly increased to Rs13.6 per unit in October, slightly higher than Rs13.52 per unit in September.

The local and imported coal-based power generation cost showed a minor difference unlike in the past as expensive imported stocks appear to have now been exhausted. Strangely, however, the local coal-based generation cost increased massively by 58pc to Rs12 per unit in October compared to just Rs7.6 per unit in September.

The imported coal-based generation on the contrary decreased to Rs13.3 per unit in October against Rs15.79 in September and Rs20 per unit in August.

Published in Dawn, December 6th, 2023