NEPRA raises electricity rate by Rs2.74/unit for second quarterly adjustment

ISLAMABAD: The National Electric Power Regulatory Authority (NEPRA) has approved an increase of Rs 2.74 per unit in the electricity price, attributing it to the second Quarterly Adjustment for FY2023-24.

This adjustment, amounting to Rs 85.2 billion, will have a uniform impact of Rs 2.7492 per kWh. As a result, the existing two quarterly adjustments of Rs 4.43 per kWh will cease to exist from March 30, 2024.

To alleviate the impact on consumers, the power regulator has decided to implement the adjustment from April 2024 onwards, following the expiration of the current applicable quarterly adjustments. 

The decision of the second quarterly adjustment is intimated to the federal government before notification.

Fuel charges adjustment for February

On the other hand, consumers should be ready to face another hike in electricity rates by Rs 4.99 per unit on account of the fuel charge adjustment (FCA) for February 2024.

NEPRA conducted a public hearing on Thursday to deliberate on a proposed increase in electricity prices by Rs 4.99 per unit.

This request, linked to February’s monthly fuel adjustment, comes at a critical juncture marked by a 12.2% decline in electricity demand and mounting concerns over escalating costs.

During the public hearing, the Central Power Purchasing Agency (CPPA) disclosed that electricity demand reduced significantly during February, attributing it to various factors.

Member NEPRA Rafiq Shaikh expressed apprehensions regarding the mounting capacity payments, stressing the urgency of devising strategic measures to mitigate these expenses.

Meanwhile, officials from the National Transmission and Dispatch Company (NTDC) emphasised the indispensable role of operating LNG-powered plants to uphold the stability of the power system.

Growing trend of solarisation

Moreover, it was informed that the growing adoption of solar energy across the nation also impacted escalating electricity prices as electricity consumption declined.

NTDC officials observed a rising trend in solar energy installations, particularly evident in areas like Lahore, where every other household is embracing solar power.

Member NEPRA noted the convenience of solar energy adoption for consumers but cautioned against its contribution to the escalating cost of electricity.

The hearing culminated with NEPRA deferring its decision on the proposed price hike, pending further examination of relevant data.

Chairman NEPRA underscored the imperative of reassessing the existing tariff structure to incentivise business activities and ensure the long-term sustainability of the energy sector.

Earlier, the CPPA had sought an increase of Rs 4.9917 per unit in tariff on account of fuel charges adjustment for February 2024.

In a petition submitted to National Electric Power Regulatory Authority, on behalf of Ex-Wapda DISCOs (XWDISCOs), the Central Power Purchasing Agency (CPPA) said that the reference fuel charged from the consumers during February was Rs 4.4337 per unit, while the cost of the energy delivered to Discos was Rs 9.4254 per unit, and requested an increase of Rs 4.9917 per unit over the reference charges on account of FCA for the month.

The increase also includes the previous adjustments of Rs 0.5484 per unit. The petition if accepted in full by NEPRA, will burden the electricity consumers with an additional burden of over Rs 40 billion inclusive of fuel charge adjustment and general sales tax. 

Generation costs

The breakdown of the data reveals varying costs across different generation sources, ranging from Rs 1.3213 per unit for nuclear to Rs 27.1968 per unit for electricity imported from Iran. No electricity was generated from High-Speed Diesel (HSD) and Furnace Oil during the month.

The CPPA, in its application, has submitted that the total electricity generated with various fuels in February was recorded at 7,130 GWh (gigawatt per hour), for Rs 8.6950 per unit. The total cost of energy was Rs 61,996 million.

According to the petition, 6,876 GWh at Rs 64,804 million had been delivered to DISCOs with 3.53% as transmission losses.

The data reveals that power generation from hydel source was 1766 GWh in February, constituting 24.77% with zero cost of power generation while power production with coal-fired power plants was 1129 GWh (local + imported coal: 994+ 135GWh). 

The share of local coal was 13.94% at Rs 14.1863 per unit while the share of imported coal was 1.89% at Rs 20.2194 per unit.

The electricity generated with local gas was 787 GWh (11.04pc) at Rs. 12.3794 per unit, 1450 GWh or 20.33%, RLNG-based electricity was generated at Rs 24.2952 per unit, 1,660 GWh or 23.29% power generation was from nuclear-based plants at Rs 1.3213 per unit, and imported Iranian energy cost Rs 27.1968 per unit during February.

Power generation from bagasse was 101 GWh in February. Bagasse has contributed 1.41% to the national grid at Rs 5.9822 per unit. 

The electricity generated from wind was recorded at 108 GWh, 1.53% of total generation, and solar at 90 GWh or 1.26% of the total generation in February 2024.