The National Electric Power Regulatory Authority (Nepra) has approved negative fuel cost adjustments (FCA) for January electricity bills, providing financial relief to consumers of both ex-Wapda distribution companies (Discos) and K-Electric (KE). The adjustments are the result of variations in global fuel prices and changes in the energy generation mix.
Details of the Adjustment
Nepra notified on Tuesday that Discos’ consumers would receive a refund of 76 paise per unit for November, while KE consumers would receive a 49-paisa refund for October. This decision followed proposals by the utilities, where KE initially suggested a refund of 27 paise per unit, later increased by Nepra to 49 paise. Similarly, Discos’ proposal of 63 paise was raised to 76 paise.
The negative FCA will not apply to domestic consumers with monthly consumption below 300 units, prepaid metering consumers, and electric vehicle charging stations (EVCS). However, domestic consumers with Time of Use (ToU) meters are eligible, regardless of their consumption levels.
Investigation into NTDC and HVDC Line Utilisation
Nepra has ordered an investigation into the National Transmission and Despatch Company (NTDC) over delays in completing the Lahore North Line. The regulator observed that the utilisation of the High Voltage Direct Current (HVDC) transmission line from Matiari, Sindh, to Lahore, Punjab, was at a low 20%. Timely completion of the Lahore North Line could have boosted utilisation by around 300MW, benefiting consumers significantly.
Concerns Over Rising Part Load Adjustment Charges (PLAC)
Nepra highlighted a steep increase in Part Load Adjustment Charges (PLAC), which rose from Rs18.703 billion in 2019-20 to Rs55.671 billion in 2023-24. The regulator urged the System Operator (SO) and the Central Power Purchasing Agency Guarantee (CPPAG) to closely monitor load patterns and propose strategies for efficient resource use. Optimising Time of Use (ToU) rates and timings was recommended to reduce reliance on inefficient part-load operations of power plants and ultimately lower PLAC costs.
Energy Purchase Price (EPP) Discrepancies
Concerns were also raised over the disparity in Energy Purchase Prices (EPP) between local and imported coal-based power plants. The EPP for Thar Coal Block-I Power Generation Company stood at Rs21.93 per unit, compared to Rs15.74 per unit for Port Qasim’s imported coal plant. Nepra attributed this to the underutilisation of Thar coal power plants, which led to higher per-unit costs due to fixed costs associated with coal mines. Increased utilisation of these plants would allow for a more efficient cost distribution, reducing the per-unit EPP.
Conclusion
Nepra’s decision to provide negative FCA adjustments brings temporary relief to electricity consumers while highlighting systemic inefficiencies in Pakistan’s power sector. Investigations into NTDC’s project delays, rising PLAC costs, and discrepancies in coal-based EPPs underscore the need for proactive planning and efficient resource utilisation. These measures aim to ensure long-term benefits for consumers and the overall energy system.