Nepra hints at Rs11.37/unit hike for KE, Rs9.89 for Discos in August bills

ISLAMABAD: The electricity consumers across the country will face unprecedented high utility bills in August 2022, as the National Electric Power Regulatory Authority (Nepra) Thursday hinted to allow K-Electric (KE) to charge Rs11.37/unit and ex-Wapda distribution companies’ (XWDiscos) to collect an additional Rs9.89/unit from consumers in their next month’s bills.

The regulator allowed these increases, as power consumers paid less than the actual power generation cost, especially in view of imported Liquefied Natural Gas (LNG) and oil in June 2022.

The Nepra held public hearings Thursday on the petitions of the privatised company and state-owned distribution companies that had sought an additional Fuel Cost Adjustment (FCA) for June 2022 of Rs11.39 and Rs9.91/unit respectively.

Nepra Chairman Tauseef H Farooqi chaired the hearing while the authority members, including Engr. Maqsood Anwar Khan and Rafique Ahmed Shaikh, were also present. After deliberation on the data submitted by the petitioners, the Nepra hinted to allow KE to charge an additional Rs11.37/unit and XWDiscos to collect Rs9.89/unit from power consumers in August.

With the implementation of this increase, the government would collect an additional Rs155 billion in August and if the 17 percent GST was included, it makes a total collection of near Rs182 billion, of which Karachiites will pay an approximately Rs26 billion (Rs22.254bn+GST).

These amounts have been preliminary calculated based on the data the CPPA and KE had submitted to the regulator. The Nepra will notify final decisions in a few days, which may vary from this figure. And this is not a tariff, but an additional collection for one month due to fuel price hike.

It is worth mentioning here that for the month of May also, the Nepra increased the power tariff by Rs7.90/ unit for XWdiscos on account of monthly fuel charges adjustment (FCA), which is being collected in July bills.

For KE too, the Nepra under FCA for May 2022 has allowed the company to charge Rs9.518/unit in two months, including Rs2.6322/unit in July and Rs6.886/unit in August 2022. It may be noted that last week, Nepra decided Rs7.91/unit increase in average base tariff across the country in three phases, starting from July 2022. Additionally, the government has also approved Rs1.55/unit increase in base tariff across the country under a quarterly adjustment.

A petition submitted by the Central Power Purchasing Agency (CPPA) on behalf of XWDiscos said that for the month of June, the reference fuel charges from the consumers were Rs5.9344/unit while the actual fuel cost was Rs15.8439/unit. Therefore, it should be allowed to pass the increase of Rs9.9095/unit to consumers.

In the data shared with the regulator, the CPPA-G informed that 13,876.14 GWh electricity was generated during June at the cost of Rs204.237b (or Rs14.7186/unit) and 13,471.05 GWh had been delivered to Discos at Rs213.434b (or Rs15.8439/unit). The losses during June were 2.92pc.

It was informed that the hydel generation decreased to 3361.21 GWh (24.22pc) during June from 3,590.92 GWh (24.5pc) during May. The data further said that 1,454.04 GWh (10.48pc) expensive electricity was generated from furnace oil during June, which was higher than the 1,290.33GWh (8.80pc) RFO-based generation of May. The RFO-based electricity in June cost Rs36.2024/unit, which was higher than May’s cost of Rs33.67/unit. No electricity was generated from high-speed diesel during the month. The natural gas-based generation contributed 1,479.32 GWh (10.66pc) of electricity to the national grid in June at Rs8.9264/unit.

The cost of re-gasified liquefied natural gas (RLNG) based electricity was also increased to Rs28.3833/unit in June from Rs27.92/unit during the previous month. The RLNG-based electricity contributed 3390.54 GWh (24.43pc) to the national grid.

The generation from coal-based power plants decreased to 1883.13 GWh (13.57pc) in June from 2018.19GWh (13.77pc) in May. Coal was comparatively cheaper source for power generation viz-a-viz RFO and RLNG, and it cost Rs20.8077/unit. In May the per unit cost of coal-based power was Rs18.01/unit.

Generation from nuclear power plants also decreased to 1265.67 GWh (9.12pc) in June from 1890.38GWh (12.90pc) in May. The per unit cost of nuclear power was Rs1.1244/unit. In June Pakistan imported 51.49GWh electricity from Iran at the cost of Rs19.57/unit. From bagasse, 83.01 GWh electricity was generated at Rs5.9822/unit. Wind, solar and mixed sources contributed 811.59GWh, 86.82 GWh, and 9.87GWh respectively to the national grid during June.