The National Electric Power Regulatory Authority (Nepra) has announced an additional fuel cost adjustment (FCA) for power distribution companies (Discos) at Rs1.81 per unit and Rs2.31 for K-Electric. This adjustment, amounting to a financial impact of Rs29 billion, will be reflected in consumer bills for August, based on their June consumption. However, this FCA will not apply to electric vehicle charging stations and lifeline consumers.
K-Electric had originally requested an FCA of Rs2.34 per unit to reclaim Rs4.4bn in August. Still, Nepra settled for an adjustment of Rs2.31 per unit, amounting to a financial impact of Rs4.3bn. Similarly, Discos had asked for an FCA of Rs1.885 per unit for June, aiming to collect Rs25bn in August, but Nepra approved Rs1.81 per unit.
Despite over 58% of power generation from cost-effective domestic fuels and a rise in the base average tariff by over Rs7 per unit, these FCAs are being implemented. A significant factor is the decreased availability of hydropower generation, which constitutes 30% of the basket share, lower than the expected rate in the pre-determined reference tariff. Hydropower, which has zero fuel cost, contributed 26.96% to the national power grid in May.
Other notable shifts in power sources include a drop in LNG-based power generation and power from domestic gas. The Central Power Purchasing Agency (CPPA) mentioned that the cost of power generation in June was Rs 9.39 per unit, higher than the reference cost of Rs 7.51, leading to the proposed additional charge.
