Islamabad, February 26, 2024 – In a recent development, the National Electric Power Regulatory Authority (NEPRA) has officially announced a National Average Uniform increase of Rs 7.0562 per unit in Fuel Charges Adjustment (FCA) for Distribution Companies (DISCOs) for the month of January 2024.
This decision comes in response to a petition filed by the Central Power Purchasing Agency-Guarantee (CPPA-G), which had requested a positive adjustment of Rs 7.62 per unit for the same period. NEPRA conducted a public hearing on February 23, 2024, where various stakeholders presented their perspectives on the matter.
NEPRA’s decision takes into account the excessive load-shedding in different DISCOs, ranging from 2 to 10 hours, leading to a reduction in overall load. The authority emphasized that timely decisions to minimize the impact on consumers, already burdened with high electricity costs, should have been taken earlier. The authority also expressed concern over the pending connections with DISCOs, suggesting that if installed, these connections could add approximately over 550 MW of demand into the system.
The CEO of CPPA-G justified the load management in the North and argued against further reductions. The Chief Financial Officer (CFO) of CPPA-G addressed concerns raised by commentators, stating that while setting reference values, all factors and stakeholder inputs are considered, though projections cannot be made with absolute precision.
Looking ahead, NEPRA announced that entities, including CPPA-G and NTDC/NPCC, are working cautiously to include all relevant parameters in re-basing tariffs for the fiscal year 2024-25.
In response to concerns about forced outages and an increase in marine insurance costs, CPPA-G stated that forced outages cannot be predicted, and marine insurance costs may impact future coal procurement decisions. Regarding the winter package, CPPA-G explained that the marginal cost was high due to South-North evacuation issues.
The authority, taking strict notice of the substantial increase in fuel costs claimed by CPPA-G for January 2024, has initiated an investigation under Section 27-A of the NEPRA Act. This investigation aims to ascertain the reasons behind the significant fuel cost surge.
Furthermore, NEPRA has decided to evaluate the performance of each DISCO individually after the month of Ramadan, focusing on potential violations of the Act, Rules, Regulations, and licenses. The performance evaluation will consider sales, losses, recovery, connections, outages, etc. The authority intends to issue directives to DISCOs and NTDC for a viable plan to improve performance and ensure compliance with benchmarks.
The Ministry of Energy (MoE) has been directed to submit Power Purchase Price forecasts for FY 2024-25, while DISCOs are urged to file Annual Indexation/Adjustment requests for the same fiscal year promptly. NEPRA emphasizes the need for timely rebasing of tariffs.
NEPRA has notified the new rate, reflecting the increased FCA, which will be applied in bills issued in March 2024. The authority remains committed to ensuring transparency and addressing concerns raised by stakeholders in the power sector.
