On Monday, the Central Power Purchasing Agency (CPPA) requested a substantial adjustment of Rs3.55 per unit as fuel cost for ex-Wapda distribution companies (Discos), aiming to collect an additional Rs33 billion from consumers in December. This request comes despite 76% of electricity generation being sourced from cost-effective domestic fuels.
This adjustment adds to the approximately 26% increase in the annual base tariff and an 18% hike in the currently implemented quarterly tariff adjustment (QTA). Consumers may see limited benefits from decreased consumption in December due to the significant FCA amount being charged for the relatively higher number of units consumed in October.
The CPPA attributes the substantial adjustment to a claim of over Rs28 billion for past adjustments, resulting in an additional cost of Rs2.95 per unit, as opposed to the 59 paise for the generation cost in October.
In a petition filed with the National Electric Power Regulatory Authority (Nepra), the CPPA, acting as the commercial agent for Discos, requested an additional FCA of Rs3.54 per unit for electricity consumed in October, with Nepra accepting the petition and scheduling public hearings for November 29.
This increase in FCA occurs despite the base average tariff rising by about Rs7.5 per unit since July 1. Notably, cheaper domestic fuels accounted for 76% of the overall power supply in September.
In October, hydropower’s contribution to the national grid decreased to 32.54%, while LNG-based power generation increased to 20.25%, securing the second position. Nuclear power’s contribution fell to 19%, and local coal-based generation increased to about 14%. The total share of coal-based power generation increased to 17.5% in October.
The CPPA claimed that consumers were charged a reference fuel cost of Rs7.89 per unit in October, while the actual cost was Rs8.4 per unit. With past claims of Rs28.3 billion, the total fuel cost was claimed at Rs11.43 per unit, necessitating an additional charge of Rs3.54 per unit, pending Nepra’s approval. If approved, the increased FCAs will be adjusted in consumers’ bills in the upcoming billing month of October.
