ISLAMABAD: The National Electric Power Regulatory Authority (NEPRA) has approved a reduction in power tariff by Rs4.89 per unit for K-Electric consumers on account of fuel cost adjustment (FCA) for August 2022.
According to the notification, the fuel cost adjustment for K-Electric consumers would be lowered by Rs4.89 per unit against KE’s petition for Rs4.21. It, however, stated that the reduction in tariff for July would be applicable for one month only. The NEPRA said the reduction in FCA would be applicable to all the consumer categories except lifeline consumers, domestic consumers consuming up to 300 units, agriculture consumers and EVCS (Electric Vehicle Charging Station).
The power sector regulator conducted a public hearing on September 29. During the hearing, the issues raised pertained to whether the requested fuel price variation was justified and whether KE had followed the merit order while giving dispatch to its power plants.
KE, in its FCA request, submitted that calculation for the month of August 2022 was based on Central Power Purchasing Agency-Guarantee (CPPA-G)’s CPPAG’s approved fuel cost component for the month of July 2022. This was subject to adjustment based on the determination of XWDISCOs FCA for August 2022 by NEPRA.
The authority, during the hearing, noted that cost of KE’s own generation was around three times higher than the cost of energy it purchases. Upon inquiry, KE explained that it has prepared a detailed plan for induction of cheaper energy sources, including renewables. KE submitted that it plans to induct 1,182 MWs of renewables by 2030.
Earlier in September, the National Electric Power Regulatory Authority (NEPRA) approved dropping the power Tariff for K-electric consumers by Rs4.87 per unit. The tariff reduction, made in the fuel adjustment charges, relieved K-electric consumers of Rs7 billion. However, Chairman NEPRA has said that K-Electric’s production and CPPA’s numbers do not match.
Multiple power sources cumulatively produced a total of 13.638 billion units of electricity in August, the CPPO application read. The average production cost for August was Rs10.11 per unit, and the reference fuel cost was Rs9.89. The CPPA advised NEPRA to raise the fuel tariff by Rs0.22, considering the fluctuation of fuel prices in the international market.