ISLAMABAD: For a change, government-owned power distribution companies (Discos) have sought a negative fuel cost adjustment (FCA) of 31 paise per unit to refund about Rs4.5 billion, overcharged to consumers in July through a 20 per cent increase in base tariff for the current fiscal year.

The Central Power Purchasing Agency (CPPA), a subsidiary of the power division, has filed a formal petition before the regulator for a 31 paise per unit (kilowatt-hour) cut over the reference tariff of Rs9.352 per unit already charged to consumers in July.

It said the actual fuel cost turned out to be Rs9.038 per unit, hence this should be returned to consumers in September bills.

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This proposed cut in FCA is because of an average 20pc increase in annual base tariff effective July 1 in which higher fuel and exchange rates have been assumed for the current fiscal year. The actual fuel cost turned out to be lower because of a decline in international market rates.

The power regulator Nepra has accepted the request for a public hearing on Aug 28.

The authority said that in July, about 14,880 gigawatt-hours (GWh) of electricity were generated at an estimated fuel expenditure of Rs133.295bn (Rs8.95 per unit), of which 14,411 GWh was delivered to Discos at a cost of Rs130.243bn (Rs9.03142 per unit).

Hydropower, which has no fuel costs, contributed the largest share of the total power supply at 36pc in July. LNG-based power generation followed at 20pc, while nuclear power supplied about 13.36pc. Local coal contributed over 10pc, and local gas accounted for 7.93pc. Imported coal provided 7.64pc of the grid’s supply in July.

The cost of LNG-based power generation in July stood at Rs24.88 against Rs26.32 per unit in June. The fuel cost of domestic gas-based generation stood at Rs13.79 per unit.

On the other hand, the cost of local coal-based generation stood at Rs11.33 per unit. The cost of imported coal-based generation amounted to Rs16.20 per unit.

Three renewable energy sources — wind, bagasse and solar — together contributed 4pc share to the grid in July. While wind and solar have no fuel costs, bagasse-based generation costs remained unchanged at around Rs6 per unit.

After approval by Nepra, the increase in FCAs would be adjusted in consumers’ bills for September.

Published in Dawn, August 17th, 2024