ISLAMABAD – The National Electric Power Regulatory Authority (NEPRA) on Wednesday directed the state-owned power distribution companies (DISCOs) and K-Electric to refund Rs1.23 per unit respectively to their power consumers in their billing month of February 2025.
The decisions have been taken on account of monthly fuel charges adjustments (FCA) for December 2024 for Discos, while for K-Electric the refund is for the month of November 2024. Notably, in its petition, the Central Power Purchasing Agency (CPPA) on behalf of these utility firms had sought permission for refunding Rs1.0353/unit. However, Nepra, after scrutiny of the data, assessed a national average uniform decrease of Rs1.23/unit in the applicable tariff for DISCOs to be billed to the consumers in the month of February.
Similarly, for K-Electric also, the regulator approved a negative fuel charges adjustment (FCA) of Rs1.23 per unit for November 2024, which will be reflected in consumer bills for February 2025.
In its petition, KE had sought the NEPRA’s approval for the refund of Rs 4.98/unit to consumers on account of fuel charges adjustments for the month of November 2024. KE had also requested and also reiterated its earlier submissions that NEPRA has issued its decision in the matter of KE’s Generation Tariff and KE has submitted required partial load, open cycle and degradation curves along with Startup Cost for approval. An amount of-Rs.8.7 billion till June 2024 is accordingly pending for adjustment. KE requested the Authority to also consider adjustment of aforementioned accumulated actualization of fuel costs so that the recovery can be made from the negative fuel cost variation to ensure consumers are not burdened at later stage.
During hearing, the Authority observed that for energy purchased from FPCL, for November 2024, KE has used fuel cost component of Rs18.7832/unit. The Authority vide its decision dated December 17, 2024 has revised the fuel cost component of FPCL with effect from October 17, 2024 to Rs.18.3963/unit. On the basis of revised fuel cost component, the KE’s claimed fuel cost for FPCL for November 2024 has been adjusted downwards by Rs.12.42 million. Similarly, the Authority also noted that for energy purchased from CPPA-G during November 2024, KE has used fuel cost component of Rs.7.2274/unit as against the Authority’s approved rate of Rs7.2046/unit. On the basis of the Authority’s approved rate, the KE’s claimed fuel cost for CPPA-G for November 2024 has been adjusted downwards by around Rs22 million.
The Authority further observed that KE has worked out fuel cost of energy supplied by Lucky Cement with gas rate of Rs3,562/mmbtu. However, the rate notified by OGRA for captive power plants is Rs.3,000/mmbtu w.e.f 01.07.2024. Accordingly, fuel cost of energy supplied by Lucky Cement has been revised downwards by Rs.1.28 million.
As per the decision, KE’s new generation tariff for the MYT 2024-30 has been determined by the Authority vide decision dated October 22,2024, whereby certain costs on account of part load, open cycle and degradation curves along-with start-up costs have been allowed. However, monthly FCAs being allowed to KE since July 2023 till November 2024, are as per the previous MYT 2017-23, wherein such costs were not envisaged. KE has worked out an amount of Rs.8.7 billion on account of these costs for the period from July 2023 to June 2024, which if approved by the Authority would be passed on to the consumers. In view thereof, and not to over burden the consumers at a later stage, the Authority has decided to allow retention of an amount of Rs.5.444 billion, from the instant negative FCA of KE. Any additional amount required would be retained from the future negative monthly FCAs of KE. The retained amount would be adjusted against the pending cost on account of part load, open cycle and degradation curves along-with start-up costs. After making the previous adjustment, NEPRA has allowed KE to refund Rs 1.23/unit to consumers in the month of February.
Member Tariff NEPRA, Mathar Niaz Rana in his additional note said that NEPRA has approved a negative FCA of Rs1.23/unit for K-Electric’s November 2024 billing, significantly lower than the Rs4.98/unit requested by the utility.
NEPRA determined that KE’s actual FCA should be negative Rs5.00/unit-having an impact of Rs7.21 billion- but withheld Rs5.44 billion pending scrutiny of Rs8.7 billion. This downward adjustment shall be applicable to all the consumer categories except lifeline consumers, domestic consumers consuming up-to 300 units, electric vehicle charging stations (EVCS), pre-paid electricity consumers of all categories who opted for pre-paid tariff and agriculture consumers. The regulator also clarified that negative adjustment on account of monthly FCA is also applicable to the domestic consumers having Time of Use (ToU) meters irrespective of their consumption level.
