Tag: Fuel Charges Adjustment

  • Electricity bills to reflect Rs3.07 per unit hike in December

    Electricity bills to reflect Rs3.07 per unit hike in December

    The National Electric Power Regulatory Authority (NEPRA) has officially sanctioned a Rs3.07 per unit increase in electricity prices for October 2023, attributed to Fuel Charges Adjustment (FCA), as communicated in its notification on Tuesday.

    This tariff adjustment will be separately reflected in the power bills based on the units consumed by consumers of all ex-Wapda DISCOs (XWDISCOs) during October 2023. NEPRA has specified that XWDISCOs are to incorporate the FCA in the billing cycle for December 2023.

    It is important to note that this tariff adjustment does not apply to K.Electric (KE) consumers, Electric Vehicle Charging Stations (EVCS), or lifeline consumers.

    The adjustment in the approved tariff for Ex-WAPDA DISCOs was prompted by variations in fuel charges for October 2023, as indicated in the request submitted by CPPA-G via a letter dated November 15, 2023, the authority clarified. NEPRA emphasised the need for XWDISCOs to adhere strictly to court orders while implementing the FCA.

    In a separate development, a NEPRA inquiry report disclosed that numerous electricity consumers in Pakistan were overcharged during July and August of the current year. 

    The report highlighted that distribution companies (DISCOs) billed consumers for over 40 days, leading to widespread overbilling. NEPRA identified MEPCO, followed by GEPCO, FESCO, LESCO, and HESCO, as the main contributors to this overbilling, holding all DISCOs responsible for this unjustified practice.

    The report recommended legal actions against power distribution companies, including K-Electric Limited (KEL), under NEPRA Fine Regulations, 2021, for violating the provisions of the NEPRA Act, Consumer Service Manual (CSM), and tariff terms and conditions.

  • Nepra approves Rs1.46 per unit fuel charge adjustment

    Nepra approves Rs1.46 per unit fuel charge adjustment

    In the midst of widespread protests over surging electricity bills in Pakistan, the National Electric Power Regulatory Authority (Nepra) has taken a significant step.

    They have given the green light for power distribution companies to impose an additional charge of Rs1.46 per unit on consumers in the form of a fuel charge adjustment (FCA) for the month of July.

    This decision, rooted in the Regulation of Generation, Transmission, and Distribution of Electric Power Act of 1997, comes as an attempt to address financial challenges in the power sector.

    The FCA, however, excludes electric vehicle charging stations (EVCS) and lifeline consumers. This means that this adjustment will be itemised separately on consumers’ bills based on their electricity usage in July 2023. The billing for this adjustment is scheduled for September 2023.

    The background to this move involves costly imported coal inventory held by coal-based power plants, particularly the Sahiwal coal power plant, and limitations in the power transmission system. The latter includes issues such as the HVDC transmission line’s inability to efficiently transport cost-effective power from southern generators. These factors have placed a considerable financial burden on power consumers.

    This tariff increase compounds the woes of consumers, who are already grappling with record inflation, high fuel prices, and elevated electricity rates. As a result, consumers are expected to bear a cumulative burden of Rs24.76 billion in their September 2023 bills due to over 14 billion units sold in July.

    In response to public protests and growing dissatisfaction, the interim government, led by Prime Minister Anwaar-ul-Haq Kakar, has sought assistance from the International Monetary Fund (IMF) to provide immediate relief to electricity consumers.

    According to Geo News, Pakistan is under an IMF programme, making any relief or subsidy contingent upon IMF approval. Negotiations between the government and the IMF have been intense, resulting in some relief for consumers using up to 200 units, allowing them to pay electricity bills in installments.

    However, the IMF rejected the government’s plan to provide relief to those consuming up to 400 units of electricity per month, which could have benefited 32 million consumers. Instead, the IMF stressed the need to address electricity and gas theft and improve revenue collection.

    Furthermore, the IMF has proposed a 45 to 50 per cent increase in gas tariffs starting July 1, pending approval by the federal cabinet. These developments reflect a challenging situation in Pakistan’s energy sector as the government grapples with the need for reform amid rising consumer discontent.

  • Nepra approves Rs2.31 per unit tariff increase for K-Electric consumers

    The National Electric Power Regulatory Authority (Nepra) has approved a tariff increase of Rs2.31 per unit for K-Electric (KE) consumers due to June 2023’s monthly fuel charges adjustment. This is slightly below KE’s requested Rs2.34 per unit hike. The new tariff takes effect in August and excludes lifeline consumers and electric vehicle charging stations.

    A public hearing on July 26, 2023, discussed KE’s proposal to address higher fuel costs for electricity generation in June. KE generated electricity at Rs24.90 per unit internally, while government-supplied electricity cost Rs11.56 per unit during that period. Nepra’s analysis resulted in an upward revision of Rs2.31 per unit for June, compared to KE’s requested increase.

    Conversely, Nepra raised the power tariff by Rs1.81 per unit for ex-Wapda distribution companies (DISCOs) in June’s fuel charges adjustment, slightly less than the hike for KE consumers. The Central Power Purchasing Agency-Guarantee (CPPA-G) requested a tariff increase of Rs1.88 per unit on behalf of DISCOs.

    This tariff adjustment, effective in August, applies to all DISCOs customers except lifeline consumers and electric vehicle charging stations. It follows a public hearing held by Nepra on July 26. Earlier, DISCOs customers paid Rs1.90 per unit under May 2023’s fuel charges adjustment, making the new rate Rs0.09 per unit lower.

    While the tariff increase has raised concerns among consumers, it has also spotlighted the delay in approving renewable energy projects. During KE’s petition hearing, an industrial consumer, Rehan Javed, highlighted pending Requests for Proposals (RFPs) with Nepra, which could expedite affordable electricity production through renewables, benefiting Karachi’s businesses.

    Nepra member Rafique Ahmed Shaikh expressed disappointment in KE’s slow progress in embracing renewable energy. Delayed approval of RFPs has hindered renewable energy initiatives.

    The Ministry of Energy’s bid to raise the base tariff for the new fiscal year, potentially leading to record-high prices, underscores the urgency of integrating renewable energy into the national energy mix.