Electricity price to surge by Rs4.66/unit in January 2024, consumers to bear Rs33bn burden

ISLAMABAD: In a move bound to add additional burden on the already burdened power consumers, electricity prices are slated to increase by up to Rs 4.6617 per unit in January 2024 on account of fuel charges adjustment (FCA) for the month of November 2023.

The anticipated electricity tariff hike under FCA of November 2023, if approved, will place an additional burden of Rs 33 billion on power consumers across the country except the electricity consumers of the K-Electric (KE).

The National Electric Power Regulatory Authority (NEPRA) faced vehement criticism during a public hearing held on Thursday.

The power regulator-National Electric Power Regulatory Authority (NEPRA) faced vehement criticism during the public hearing held here on Thursday for bowing to the pressure of power division to pass on the burden of electricity prices to the power consumers.

However, NEPRA said that it had worked independently and conducted due diligence/scrutiny of the data before making a decision regarding the electricity prices.

The Central Power Purchasing Agency (CPPA) defended the move, stating that consumers were already paying Rs 3.08 kilowatt hour (kWh) on account of previous fuel charges adjustments and therefore a net impact on the electricity bills of the consumers would be Rs 1.58 per unit.

The NEPRA also questioned the CPPA for running power plants on imported fuel during the period under review while shutting down cheaper, domestically fueled plants for maintenance. The shutdown of the Thar coal-based plant for maintenance was highlighted as a contributor to higher electricity prices.

The regulator also noted a 13 percent decline in the electricity consumption and criticized the use of expensive liquefied natural gas (LNG) for power generation in November 2023 that caused higher electricity prices. The CPPA had also placed a request for previous adjustments of Rs 15.9 billion to pass on to the consumers in electricity bills in January 2024.

Responding to the concerns about overbilling, NEPRA affirmed its commitment to enforcing its decisions, issuing explanations to power distribution companies (DISCOs) and signaling legal action if necessary.

The power regulator said that they had implemented its decision in the past and therefore, they would also enforce its recent decision. It (NEPRA) said that they had issued an explanation to the power distribution companies (DISCOs) and would start a legal course of actions against them (DISCOs).

The Central Power Purchasing Agency (CPPA), acting on behalf of the DISCOs, applied to NEPRA for an increase in electricity prices under the Fuel Charges Adjustment (FCA) for November 2023.

The CPPA’s application reveals that the total electricity generated from various fuels in November was 7,547 GWh, at a cost of Rs 7.1704 per unit, resulting in a total energy cost of Rs 54,113 million. The data also indicates that the net electricity delivered to DISCOs in November 2023 was 7,288 GWh, at a rate of Rs 9.4448 per unit, with the total cost amounting to Rs 68,834 million.

According to CPPA’s data, electricity generated in November 2023 with hydel source constituted 36.50 percent, coal-fired plants 13.1pc, and gas-based plants 9.21%., nuclear 20.8%, RLNG 10.6%.

Ahmad Ahmadani
Ahmad Ahmadani
The author is a an investigative journalist at Profit. He can be reached at [email protected].

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