Nepra notifies Rs1.53 per unit increase for December 2020

ISLAMABAD-The National Electric Power Regulatory Authority (NEPRA) on Wednesday increased power tariff by Rs1.5359 per unit on account of monthly fuel charges adjustment (FCA) for December 2020.

The Central Power Purchasing Agency (CPPA) on behalf of DISCOs had requested for permission to charge Rs1.8085 per unit from consumers, however NEPRA has allowed an increase of Rs1.5359 per unit, said a notification issued by NEPRA. 

The decision will have an impact of Rs11.6 billion and the power distribution companies (DISCOS) would collect the amount from electricity consumers in the bills for month of February 2021. NEPRA notified its final decision allowing DISCOs to charge Rs1.5359/kwh from all the consumer categories except lifeline consumers (consuming up to 50 units/month) of all the ex-WAPDA DISCOs. 

For the month of December the CPPA in its petition said, it had charged consumers a reference fuel tariff of Rs4.4602 per unit in December while the actual fuel cost turned out to be higher. Hence, it should be allowed to charge Rs1.8085 per unit additional cost from consumers. The Regulator held its public hearing on 27 January on determining the final permission.

In its decision, NEPRA said that XWDISCOs shall reflect the fuel charges adjustment in respect of December 2020 in the billing month of February 2021.  In the decision, regulator said that from perusal of the information so provided by CPPA-G, the actual pool fuel cost for the month of December 2020 is Rs6.2687/unit, against the reference fuel cost component of Rs4.4602/unit. 

The CPPA-G also claimed an amount of Rs10,477 million on account of previous adjustments & supplemental charges for the month of December 2020. However, the Authority verified the same as Rs9,086 million.

Here it is pertinent to mention M/S North Star Textile and APTMA vide their comments dated January 22, 2021, on the inclusion of previous adjustments in the FCA of December 2020, has submitted the following comments: “We are concerned to see that December fuel adjustment charges are being increased from Rs0.3199 to Rs 1.8085 under heads of previous adjustments/supplemental charges and transmission losses”. 

Please note the previous adjustments if any do not pertain to the month of December and it would be illegal to add them to the units consumed in December. We have converted to using WAPDA from gas in December based on the incremental package offered by government and should not be charged any previous adjustments for our December consumed units. To load December units with previous adjustments is immoral and illegal. 

Regarding request of the commentators to allow such arrears through quarterly adjustments, the Authority considers that previous adjustments claimed by CPPA-G are related with Fuel costs, and, therefore, need to be accounted for in the monthly FCAs, instead of quarterly adjustments, as it does not fall within the scope of quarterly adjustment mechanism,

Regarding charging of fuel costs pertaining to previous months in the subsequent monthly FCAs, the Authority noted that it not possible to adjust such costs in the FCA for the month to which it pertains, as the same has already been determined, notified and charged from the consumers, therefore, any such adjustments either positive or negative, are adjusted in the subsequent monthly FCAs, otherwise would result in piling of huge costs, which is neither in the interest of the consumers nor of the Power sector.