Islamabad: The National Electric Power Regulatory Authority (NEPRA) has approved the Federal Government’s Winter Demand Initiative for Distribution Power Company (DISCOs) and K-Electric (KE) consumers.
According to a NEPRA statement on Friday, the winter package will benefit industrial gauge and wheel consumers, even though they were not included in the government’s order initially.
Under the winter package, the price of additional units used, compared to the previous year, will be Rs 26.07 per unit, and the package will be valid for three months (December to February).
The statement further stated that relief or reduction will be offered to consumers in December bills. In addition,
The authority said that the standard consumption will be the highest of either the consumption of the relevant month in the fiscal year 2024 or the historical consumption over the past three years for the relevant months, based on the approved formula.
NEPRA considered that the proposed initiative, being subsidy neutral, would have no impact on the tariff set by NEPRA, as the difference in marginal cost, if any, would be passed through the monthly FCAs. On the other hand, if marginal cost remains lower, its benefits will be shared with consumers through quarterly tariff adjustments.
Regarding the implementation of the initiative for KE consumers, the Authority noted that KE submitted a multi-year tariff (MYT) request, requesting that the tariff be amended based on the actual data sent, in line with the mechanism applied to electricity distribution companies, and this request is currently under review by the Authority.
The Authority is also aware of the fact that excluding KEL consumers from the winter package will not only negatively impact sales growth, a factor which the Federal Government took into account when introducing the package, but will also result in discriminatory treatment of KE consumers. Therefore, the Authority recognized that KEL consumers should not be deprived of the benefits of the winter package offered by the Federal Government.
In light of this, the Authority has decided that KEL will be compensated in the same manner as other distribution companies for the duration of this winter package when determining/amending the final consumer tariff. As such, KEL is committed to offering the same benefit to its customers as part of the winter package.
Meanwhile, NEPRA has approved a reduction of Rs 1.14 lakh per unit for the monthly Fuel Duty Adjustment (FCA) for October 2024.
According to NEPRA, the Central Power Procurement Agency (CPPA) had applied for a reduction of Rs 1.01 per unit, which NEPRA considered after holding a public hearing on November 26.
The discount will apply to all Distribution Company (DISCO) consumers, with the exception of Lifeline consumers, prepaid users and electric vehicle charging stations. However, this will not apply to K-Electric customers.
The Authority has reviewed the request/information submitted by CPPA seeking a monthly fuel cost adjustment (FCA). From going through the information provided by CPPA, the actual fuel cost for October 2024, as claimed by CPPA, was Rs 9.2593 per unit, against the reference fuel cost component of Rs. 10.2752 per unit. Actual fuel duty, as claimed by the CPPA-G, for October 2024 has decreased by Rs. 1.0159 per unit compared to reference fuel duty.
Furthermore, the CPPA-G also provided data that during October 2024, 21.93 GWh were supplied by power producers that have bilateral contracts with power distribution companies.
The Authority calculated the fuel cost for the month of October 2024 after accounting adjustments and including the costs arising from the application of various factors.
In light of the Authority’s previous decisions to separate the FCA for each DISCO after accounting for energy purchased from the CPPA, bilateral contracts and net metering were prepared as part of each DISCO’s individual basket. However, since the uniform tariff regime is applicable in view of the NEPRA Act and NE Policy and Plan, the authority has also worked out a monthly uniform national average of FCA to be charged from all DlSCO consumers and in view of this, NEPRA has approved a reduction of Rs 1.14 per unit To adjust monthly fuel surcharges for October 2024 to be applied to electricity bills for December 2024.
Later, Energy Minister Awais Al-Aghri commented that the government is committed to continuing to reduce electricity prices for consumers.
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