Nepra, on Wednesday, authorized ex-Wapda distribution companies (XWDiscos) to impose an Rs2.83 per unit charge on consumers’ electricity bills for May as part of fuel cost adjustment (FCA) charges. The FCA, according to Nepra, relates to the month of March. This adjustment will be applicable to all consumer categories except Electric Vehicle Charging Stations (EVCS) and lifeline consumers. It will be reflected in consumers’ bills based on units billed in March.
Last month, the government requested Nepra’s clearance to recover about Rs 23 billion in FCA from consumers for electricity consumed in March, despite a significant portion of power generation relying on cheaper local fuels. The proposed additional FCA was considerably higher than the pre-fixed fuel cost already charged to consumers in March, raising concerns about the power sector’s forecasting capabilities. Nepra had accepted the request for a public hearing on April 26.
The higher proposed FCA for March is primarily attributed to higher domestic coal and gas prices, despite zero use of imported fuels like coal, diesel, and furnace oil. In March, about 8,023-gigawatt-hour (GWh) of electricity were generated at an estimated fuel expenditure of Rs66.7 billion, with 7,756 GWh energy delivered to Discos at a cost of Rs72.67 billion.
Consumption trends showed a decline, with consumption in March 8.3% lower compared to the same month last year. The Rs2.94 per unit FCA for March this year was more than double the FCA of the same month last year.
During the April 26 hearing, Nepra criticized power companies for inefficiencies and the use of expensive power plants despite the availability of cheaper sources, indicating the possibility of allowing them to charge consumers an additional Rs 22.8 billion in the billing month of May.
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