Rs3.33 per unit Hike Notified for April

On Thursday, the National Electric Power Regulatory Authority (Nepra) announced an additional fuel cost of Rs3.33 per unit for consumption in April. This adjustment aims to allow ex-Wapda distribution companies (Discos) to raise an additional Rs29 billion in June. The government confirmed a minor impact of solar net metering on electricity sales.

Nepra’s order stated, “has reviewed and assessed a National Average Uniform increase of Rs3.3321/kWh in the applicable tariff for ex-Discos on account of variations in the fuel charges for April 2024.”

The net tariff increase due to FCA’s impact would be about Rs6 per unit because of its partial spillover to the quarterly tariff adjustment (QTA) to follow later.

This adjustment will apply to all consumer categories except Electric Vehicle Charging Stations (EVCS) and lifeline consumers. It will be shown separately in the June bills based on units consumed in April.

Nepra also noted that the Central Power Purchasing Agency (CPPA) had included 100 GWh (gigawatt hours) for net metering units procured during April, accounting for just 1.15% of the total 8,640GWh in the national grid. This indicates a negligible contribution from solar net metering.

The lower consumption in April, almost 14% lower than the same month last year, can be attributed to lower temperatures, changed consumption patterns due to the economic slowdown, and consumers shifting to alternate sources.

The CEO of CPPA mentioned lower generation from hydro and local coal compared to the generation assumed in the reference tariff. Despite not much variation in actual fuel prices, certain fuels like RLNG were utilized in higher quantities than the reference values due to system requirements and contractual obligations.

The financial impact of the high use of RLNG was reported at Rs32bn in April against the total fuel cost of Rs75bn.

The increase in FCA is on top of about a 26% increase in the annual base tariff and another 18% hike under two quarterly tariff adjustments to be paid by consumers at the rate of Rs4.65 per unit.

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