ISLAMABAD, july26: Government-owned power distribution companies (Discos) have requested an additional fuel cost adjustment (FCA) of Rs2.63 per unit in order to collect about Rs35 billion more from customers in the upcoming billing cycle for the energy consumed in June. This is due to the recent rise in base prices.
A formal appeal seeking an increase of Rs2.63 per kilowatt-hour (unit) over the reference rate of Rs7.14 per unit being paid to customers was submitted with the regulator by the electricity division subsidiary, Central electricity Purchasing Agency (CPPA), in June. Despite the fact that about 75% of the power supply was produced using less expensive local fuels, mostly renewables, this rise has occurred.
This planned FCA rise comes on top of a yearly base tariff increase of 20 percent on average that went into effect on July 1. Customers would thus be forced to pay hefty rates in the midst of high usage in warm, muggy weather. Nepra, the electricity regulator, has granted permission for a public hearing on July 31. According to the report, the CPPA changed its initial request for extra FCA from Rs. 2.10 per unit to Rs. 2.63 per unit.
The increased use of liquefied natural gas (LNG), higher domestic coal and gas costs, and unanticipated power generation from furnace oil are all reasons for the higher FCA for June 2024. Acting as Discos’ commercial representative, the CPPA filed a petition requesting an extra FCA of Rs2.63 per unit in the month of August for power used in June. The real gasoline cost was found to be Rs9.77 per unit, notwithstanding the allegation that the reference fuel cost for June was fixed at Rs7.14 per unit.
13,459 gigawatt-hours (GWh) of electricity were produced in June, according to the agency, at an estimated fuel cost of Rs119.7 billion (Rs8.89 per unit). Of that amount, 13,071 GWh were supplied to Discos at a cost of Rs127.7 billion (Rs9.77 per unit).
The figures indicated a slight decrease in consumption, with 13,327Gwh consumed in June 2024 being around 1.9 percent less than in the same month the previous year. Additionally, the June FCA of Rs2.63 this year is 40% more than Rs1.88 from the previous year.
With no fuel expenditures, hydropower accounted for the greatest portion of the overall power supply in June, contributing 35%, up from 30% in the previous year. Nuclear power provided around 14.85 percent, with LNG-based power generation coming in second at 18 percent. Over 11% came from local coal, while 8.66% came from local gas. In June, 4.74 percent of the grid’s coal supply came from imports.
In June, the cost of generating power using LNG jumped to Rs26.32 per unit, up from Rs24 in May and Rs22.8 in April. Domestic gas-based generation’s fuel cost went up little to Rs13.93 per unit in May from Rs13.19 in May.
However, domestic coal-based electricity now costs just Rs11.1 per unit, down from Rs11.7 in May. In June, the cost of imported coal-based power dropped from Rs16.8 per unit to Rs15.5.
In June, the combined contribution of three renewable energy sources—solar, wind, and bagasse—to the grid was 5.14 percent, up from 4.97 percent in May. The fuel prices for wind and solar power are zero, while the cost of bagasse-based generating has stayed at about Rs6 per unit.
The rise in FCAs would be reflected in customers’ August bills following Nepra’s approval.
