Rs4.5 billion refund likely for power consumers in September bills

Government-owned power distribution companies (Discos) have proposed a reduction in the fuel cost adjustment (FCA) by 31 paise per unit, potentially leading to a refund of approximately Rs4.5 billion to consumers in their September bills. 

This follows the overcharging in July due to a 20% hike in the base tariff for the current fiscal year.

The Central Power Purchasing Agency (CPPA) has submitted a formal petition to the National Electric Power Regulatory Authority (Nepra), requesting the 31-paise-per-unit reduction from the reference tariff of Rs 9.352 per unit that was charged to consumers in July. The actual fuel cost for July turned out to be Rs9.038 per unit. 

This proposed reduction is attributed to the lower actual fuel costs compared to the higher rates assumed in the annual base tariff increase effective from July 1. The decline in international market rates contributed to the lower fuel costs.

Nepra has scheduled a public hearing on the petition for August 28.

If approved by Nepra, the decrease in the FCA would be reflected in consumers’ bills for September.

In July, approximately 14,880 gigawatt-hours (GWh) of electricity were generated at an estimated fuel expenditure of Rs133.295 billion, averaging Rs8.95 per unit. Of this, 14,411 GWh was delivered to Discos at a cost of Rs130.243 billion, averaging Rs9.03142 per unit.

Hydropower, which incurs no fuel costs, contributed the largest share of the total power supply at 36% in July. LNG-based power generation followed at 20%, while nuclear power supplied around 13.36%. Local coal accounted for over 10%, with local gas at 7.93%. Imported coal contributed 7.64% of the grid’s supply.

The cost of LNG-based power generation in July was Rs24.88 per unit, down from Rs26.32 per unit in June. The fuel cost for domestic gas-based generation stood at Rs13.79 per unit. Local coal-based generation costs were Rs11.33 per unit, while imported coal-based generation amounted to Rs16.20 per unit.

Renewable energy sources, including wind, bagasse, and solar, collectively provided a 4% share to the grid in July. While wind and solar have no fuel costs, bagasse-based generation costs remained steady at around Rs6 per unit.