ISLAMABAD: The National Electric Power Regulatory Authority (Nepra) on Friday notified an additional Rs3.33 per unit fuel cost adjustment (FCA) for May consumption, allowing ex-Wapda distribution companies (Discos) to raise an additional Rs41 billion in July.
In contrast, the regulator announced a Rs1.67 per unit reduction in FCA for K-Electric consumers based on their April consumption, which will be reflected in their current bills. This will result in an overall financial impact of around Rs2.35bn. K-Electric had proposed a Rs1.17 per unit negative FCA, amounting to a Rs1.67bn refund to consumers, but Nepra revised this to Rs1.67 per unit.
The KE’s negative adjustment will apply to all consumer categories except lifeline consumers, domestic users consuming up to 300 units, electric vehicle charging stations and agriculture consumers. However, domestic consumers with Time of Use (ToU) meters will benefit from this reduction regardless of their consumption levels.
Regarding Discos, Nepra said it “reviewed and assessed a National Average Uniform increase of Rs3.3287 per kWh (kilowatt-hour) in the applicable tariff for XWDISCOs on account of variations in the fuel charges for the month of May 2024”.
Discos allowed Rs3.33 hike for May, KE to refund Rs1.67/unit for April usage
The net increase for Discos’ consumers would range between Rs11 and Rs14 per unit in the current month, given the applicability of the base tariff increase of Rs5.75 to Rs7.12 per unit already approved by the cabinet and pending the formality of Nepra’s consent on July 8.
The Rs3.33 per unit additional FCA would translate into Rs5.50 per unit because of partial spillover to the quarterly adjustment to follow later.
The Central Power Purchasing Agency (CPPA) had sought permission to collect Rs41.87bn additional revenue in July through Rs3.4133 per unit additional FCA for May consumption over the reference tariff of Rs5.71 per unit already charged to consumers in May.
It said the actual average fuel cost in May amounted to Rs9.122 per unit. This is almost 60 per cent higher than the pre-fixed fuel cost and calls into question the capabilities of the power sector bureaucracy to forecast fuel costs even for six to seven months. The additional FCAs have ranged between 50pc and 115pc in recent months than pre-determined fuel costs notified at the start of the current fiscal year.
The CPPA had claimed that a total of about 12,617 gigawatt hours (GWh) of electricity were generated at an estimated fuel expenditure of Rs110.3bn (Rs8.744 per unit) in May, of which 12,267 GWh were delivered to Discos at the cost of Rs111.9bn (Rs9.122 per unit).
After minor adjustments, the regulator worked out the total fuel cost for May at Rs9.038 per unit instead of Rs9.122 per unit demanded by the CPPA.
The regulator reported that, according to CPPA’s chief executive officer, an LNG import order was placed around three months before the consumption for running RLNG plants when it was anticipated that due to high temperatures, as forecast by the Met department, the electricity demand would increase, leading to the utilisation of RLNG plants.
“However, the weather remained moderate for the first half of the month, but since the RLNG had already been ordered, the same was required to be consumed,” the CPPA claimed, adding that power generation was 5.5pc lower than the generation assumed in the reference tariff.
Fine on Discos
Separately, Nepra imposed about Rs115 million fine on four distribution companies from Faisalabad, Sukkur, Peshawar and Lahore for loss of lives of their own employees and common citizens due to poor safety measures and electrocutions. They were directed to pay compensation at the rate of Rs4m each to the bereaved families and give jobs to their next of kin.
The Faisalabad and Sukkur electric supply companies were fined Rs15m each for nine fatalities each.
The regulator said a total of nine fatalities were reported in Fesco, seven of them caused by insufficient safety measures of the supply company. The responsibility for four out of six deaths of private citizens and three of Fesco’s staff was fixed on the company.
Likewise, nine deaths were reported in Sepco’s jurisdiction, including six employees and three from the general public. Sepco was held responsible for the electrocution of five employees and one private citizen.
On the other hand, 41 deaths were reported in Peshawar Electric’s area, including 12 employees and 29 other citizens. The company was held accountable for 24 deaths, including 12 employees and 12 others, while 17 others were found to be outside Pesco’s responsibility. The company was thus imposed a Rs62m fine besides payment of Rs4m compensation to each affected family.
Lahore Electric was fined Rs23m and payment of compensation to nine families, including eight belonging to company employees and one private citizen.
In another case, a death was reported in the jurisdiction of Tribal Electric Supply Company, but an investigation revealed that the company was not responsible since a private electrician had illegally mishandled the company’s infrastructure, thus exonerating the power company.
Published in Dawn, July 6th, 2024
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