ISLAMABAD: The National Electric Power Regulatory Authority (NEPRA) has approved the Winter Demand Initiative of the federal government for the consumers of power distribution companies (DISCOs) and K-Electric (KE) consumers.
According to a NEPRA statement on Friday, the winter package will benefit industrial net metering and wheeling consumers, even though they were not initially included in the government’s request.
Under the winter package, the price for additional units used, compared to the previous year, will be 26.07 rupees per unit, and the package will be valid for three months (from December to February).
The statement further mentioned that the relief or reduction will be provided to consumers in their December bills. In addition,
Authority said that the benchmark consumption will be the higher of either the relevant month’s consumption in FY 2024 or the historical consumption over the past three years for the relevant months, based on the approved formula.
The Authority (NEPRA) considered that the proposed initiative, being subsidy neutral, would not impact the NEPRA-determined tariff, as variation in marginal cost, if any, would be passed on through monthly FCAs. On the other hand, if marginal cost remains lower, the benefit will be shared with the consumers through quarterly tariff adjustments.
Regarding the implementation of the initiative for KE consumers, the authority observed that KE filed its Multi-Year Tariff (MYT) Petitions, requesting a tariff adjustment based on actual sent-out data, in alignment with the mechanism applied to DISCOs and this request is currently under the Authority’s review.
The authority is also aware that excluding KEL consumers from the winter package would not only negatively impact sales growth, a factor considered by the federal government when introducing the package, but would also result in discriminatory treatment of KE consumers. Therefore, the authority recognized that KEL consumers should not be deprived of the winter package benefits provided by the federal government.
In light of this, the authority decided that KEL will be compensated in the same manner as other DISCOs for the duration of this winter package when determining/adjusting the consumer end tariff. As such, KEL is obligated to extend the same relief to its consumers as part of the winter package.
Meanwhile, NEPRA has approved a reduction of 1.14 rupees per unit for the monthly fuel charges adjustment (FCA) for October 2024.
According to NEPRA, the Central Power Purchasing Agency (CPPA) had submitted a request for a 1.01 rupee per unit reduction, which NEPRA considered after holding a public hearing on November 26.
The reduction will apply to all consumers of distribution companies (DISCOs), excluding lifeline consumers, prepaid users, and electric vehicle charging stations. However, it will not apply to K-Electric customers.
The Authority reviewed the request/information provided by CPPA seeking monthly fuel cost adjustment (FCA). From the perusal of the information so provided by CPPA, the actual pool fuel cost for October 2024, as claimed by CPPA, was Rs.9.2593 per unit, against the reference fuel cost component of Rs. 10.2752 per unit. The actual fuel charges, as claimed by CPPA-G, for October 2024 decreased by Rs. 1.0159 per unit as compared to the reference fuel charges.
Further, CPPA-G also provided data that during October 2024, 21.93 GWh were supplied by power producers having bilateral contracts with DISCOs.
The Authority calculated the fuel cost for the month of October 2024, after accounting adjustments and including costs arising due to the application of various factors.
In light of the earlier decisions of the authority by separating the FCA of each DISCO after accounting for the energy purchased from CPPA, bilateral contracts and Net metering as part of an individual basket of each DISCO have been worked out. However, since a uniform tariff regime is applicable in light NEPRA Act, NE Policy and Plan, therefore, the Authority also worked out a National Average Uniform monthly FCA to be charged to all the consumers of DlSCO, and in light of it, NEPRA approved a reduction of 1.14 rupees per unit for the monthly fuel charges adjustment for October 2024 to be applicable in electricity bills of December 2024.
Later, Power Minister Owais Laghari commented the government is committed to further reducing the electricity prices for the consumers.
