Nepra announces ‘double relief’ for power consumers

• Okays Rs1.14 negative FCA for December; three-month winter package takes effect
• Power tariff relief extended to K-Electric, solar users
• Consumers to get up to 50pc discount on incremental electricity use

ISLAMABAD: The National Electric Power Regulatory Authority (Nepra) claimed to have cleared a rare double dose of relief for electricity consumers on Friday, including a negative monthly fuel cost adjustment (FCA) of Rs1.14 per unit for December and discounts of Rs6-23 per unit on 25 per cent incremental power consumption for three winter months.

In two separate orders, Nepra, on the advice of the government, also extended the winter relief package on incremental consumption to K-Electric customers, solar net-metered consumers and large wheeling industrial consumers.

Nepra’s first order confirmed a “National Average Uniform decrease of Rs1.1445 per kWh” in the applicable tariff for power distribution companies (Discos) for electricity consumed in October 2024, to be reflected in December bills. However, as the Rs1.28 per unit negative FCA applied in November expires, the actual relief will be about 14 paise per unit lower in December.

In a dissenting note, Nepra’s tariff member Mathar Niaz Rana questioned payments of about Rs1.7bn to sugar mills against controversial past adjustments. He argued that consumers could have received a Rs1.32 per unit negative FCA — a relief of another four paise compared to November’s rates — if the payment had been deferred.

He noted that sugar mills had reduced the rates for their power supply to Discos through government-led negotiations; therefore, the previous higher rate should have been deferred.

The Central Power Purchasing Agency (CPPA), on behalf of Discos, had sought Rs1.02 per unit negative FCA for the electricity consumed in October, claiming that it had charged Rs10.275 per unit FCA in October in advance but its fuel cost amounted to Rs9.25 per unit. Nepra worked out the actual fuel cost at Rs9.13 per unit, thus a negative FCA of Rs1.14 per unit.

In its second judgement, Nepra approved the winter demand initiative offered by the government on 25pc incremental consumption to both K-Electric and Discos. It also extended its application to solar net-metered and industrial consumers with the consent of the government on the demand of the industrial sector.

It said that, unlike in the past, K-Electric would ensure the winter package reached its consumers, and any loss in terms of actual units would be covered by the government, like other Discos.

It said the winter initiative will apply to all eligible industrial, commercial, general service and domestic (Time of Use and non-ToU consumers exceeding 200 units) consumers of Discos and K-Electric.

The government introduced cheaper electricity rates on marginal cost (no-profit, no-loss or subsidy-neutral) to residential, commercial and industrial consumers on incremental usage with a 25pc cap.

The package applies to incremental consumption over the past years and entails an 18-50pc discount depending on various consumer categories and consumption slabs.

The additional consumption would be worked out under a formula based on the last three years’ billed units. For this, historical consumption for the last three years will be higher than last year’s consumption or average weighted consumption on a rolling basis, with 50pc weight to FY2024, 30pc to FY2023 and 25pc to FY2022.

At present, the base rate for domestic consumers, according to the power division, is a minimum of Rs37.49 per unit and a maximum of Rs52.07, but additional consumption will be charged at Rs26.07 per unit for both categories.

This would be 30pc (Rs11.42 per) cheaper compared to the minimum rate of Rs37.49, and 50pc (Rs26 per unit) cheaper compared to the maximum rate.

The base rate for commercial consumers currently ranges between Rs39.53 and Rs48.78 per unit. They will also be charged a flat rate of Rs26.07 per unit on incremental consumption. The discount on additional consumption for this category will be Rs13.46 to Rs22.71 per unit, or 34pc to 47pc cheaper.

The base rate for industrial consumers stands at Rs31.79 to Rs41.12 per unit. They will also be charged Rs26 per unit on incremental units. Their discount will thus range between Rs5.72 to Rs15.05 per unit — cheaper by 18pc to 37pc compared to base rates.

Published in Dawn, December 7th, 2024