FCA for Oct 2023: Discos seek Nepra nod for Rs3.5/unit additional charges in December bills

ISLAMABAD: The ex-Wapda distribution companies (XWDiscos) have formally sought an approval from the National Electric Power Regulatory Authority (Nepra) to impose additional charges of Rs3.5339 per unit on consumers in December.

The petition, related to the monthly fuel charges adjustment (FCA) for October 2023, raises eyebrows as approximately 84 percent of the claims pertain to the recovery of previous adjustments totaling a substantial Rs28.325 billion (or Rs2.9592/unit).

A parallel concern arises as the Central Power Purchasing Agency (CPPA), representing Discos, discloses nearly identical per unit costs for local and imported coal. The per unit generation cost of local coal surged by 59 percent in October 2023 to Rs12.104/unit from Rs7.622/unit in September 2023. Conversely, imported coal’s per unit generation cost decreased by 15.96 percent to Rs13.27/unit compared to Rs15.789/unit in September 2023.

Power generation figures reveal a 9.8 percent reduction to 1,334 gigawatt-hours (GWh) from local coal and a 48 percent cut to 336 GWh from imported coal in October 2023 compared to the previous month.

In October 2023, the government notably produced less electricity from renewable and cost-effective sources compared to the same month last year. Had these resources been utilised, the costs would have further decreased, benefiting consumers with lower payments.

According to the data furnished with the regulatory authority, the CPPA’s report indicates that a total of 9,572GWh of electricity was generated in October 2023, with an associated cost of Rs79.07 billion (equivalent to Rs8.2605 per unit). Moreover, 9,253GWh, originally priced at Rs77.41 billion was delivered to distribution companies (Discos), while transmission losses stood at 2.93 percent. However, with the inclusion of additional Rs28.325 as the previous claims, the total amount goes up to Rs105.737 (or 11.4277 per unit).

The petition outlines that in October, the consumers were charged a reference fuel cost of Rs7.8938 per unit, while the actual fuel cost incurred was Rs11.4277 per unit. The CPPA argues that the additional cost burden of Rs3.5339 per unit should be transferred to the consumers.

Power generation in October 2023 dropped by 13.56 percent from the previous year and 28.2 percent from September 2023. The generation cost decreased 8.43 percent to Rs8.2605 per unit YoY but increased 11.37 percent from September 2023.

In October 2023, hydropower generation experienced a marginal reduction of less than one percent. Nuclear power saw a notable decline of 17.2 percent, solar power decreased by 3.9 percent, and wind power dropped by over 14 percent compared to the power generated from these sources in October 2022.

Natural gas-based generation in October 2023 was reduced by 30 percent to 704GWh over the previous month costing Rs13.606/unit. No electricity was generated from the high-speed diesel and furnace oil.