Nepra approves hike in FCA for September bills

In response to mounting consumer discontent over inflated electricity bills, the National Electric Power Regulatory Authority (Nepra) has implemented another electricity price increase of Rs1.46 per unit, citing it as a fuel charge adjustment (FCA) for July 2023.

According to Nepra’s announcement, the adjustment for ex-WAPDA distribution companies (XWDISCOs) was based on the actual electricity generation cost in July, which was Rs8.3565 per kWh, compared to the reference fuel charge component of Rs6.8935 per kWh. As a result, an increase of Rs1.4630 per kWh has been applied to XWDISCOs consumers.

It’s important to note that this adjustment will affect all consumer categories except electric vehicle charging stations and lifeline customers. The increase will be clearly detailed on consumers’ bills, reflecting their electricity usage in July 2023.

XWDISCOs are mandated to incorporate this FCA into the billing for September of this year, and Nepra has stressed the importance of adhering to court orders while implementing the adjustment in compliance with the law.

This price hike underscores the ongoing volatility in fuel costs, which significantly influence electricity tariffs and will have an impact on consumers’ monthly bills.

Previously, Nepra held a public hearing where concerns were raised about the inefficiency of electricity companies in the country. During the hearing, it was revealed that the Sahiwal coal-fired power plant, initially granted a reference tariff of Rs16 per unit, was claiming Rs27 per unit. The plant’s use of expensive imported coal, despite cheaper alternatives, raised questions about cost-efficiency and its impact on consumers.

Furthermore, it came to light that two coal-based power plants with a combined capacity of 3,900MW were only supplying 2,200MW, leaving 1,700MW unused. Nepra emphasized the potential for generating cheaper power as intended, with coal-based electricity at a base tariff of Rs16 per unit.

Consumers were reported to have shouldered the burden of Rs1.5 billion in system constraints related to fuel adjustments for July 2023.

In addition, Nepra raised concerns about the collapse of 138 towers belonging to the National Transmission and Despatch Company (NTDC) over the past five years. NTDC officials claimed that Nepra’s suspension of Rs38 billion in payments to the company had created financial challenges for them.

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