Power customers’ January bills will increase by Rs4.66 per unit

Due to the fuel adjustment for November, consumers can expect to see another spike in electricity costs in January 2024, with bills as high as Rs4.66 per unit.

If the proposed hike is put into effect, power customers will be burdened with an extra Rs33 billion. A public hearing was held by the National Electric Power Regulatory Authority (Nepra) about the petition submitted by the Central Power Purchasing Agency (CPPA) on behalf of the discos.

Nepra asked the CPPA why more economical plants were being shut down for repair while power plants using imported fuel were being run. Notably, the coal-fired Thar plant’s maintenance-related outage raised the cost of electricity. Moreover, in November 2023, the use of power plants powered by expensive imported LNG fuel and a 13 percent drop in electricity demand increased the cost burden on consumers.

Negative growth in power generation drives up costs when demand drops below the reference level, according to the chairman of Nepra. As a result, quarterly adjustments (QTAs) and monthly fuel costs (FCAs) are positively adjusted. Capacity charges increase as a result of poor capacity use because customers must always pay fixed rates. The CPPA had asked in its petition for the earlier adjustments, totaling Rs15.9 billion (Rs2.117/unit), to be transferred to customers’ January 2024 bills.

In response to charges of overcharging, Nepra defended its history of carrying out previous rulings and promised to uphold its most recent ruling. Power distribution businesses (Discos) received explanations from the regulator, along with notice that legal action will be taken against them. The CPPA said, “Discos manage loads due to losses, hydel generation has decreased, expensive generation is occurring, and gas supply is unavailable to power plants, leading to load management,” in response to an inquiry regarding recent loadshedding. Additionally, we apply 2-hour load management in compliance with regulatory regulations.

In the meantime, the electricity division blamed numerous grid station failures in the Multan region as well as other Discos for the recent load shedding that occurred on December 25 and 26 in a separate statement. System limitations were brought about by the tripping of the 132kv, 220kv, and 500kv grid stations as well as a decrease in hydel generation because of the fog. One source of the 1,600 MW generation shortfall was the closure of the canal, while the limited availability of LNG was the reason for the 700 MW gap. In an effort to reduce shortages, the Power Division is producing 800 MW of power using furnace oil to make up for the lack of LNG. In order to control system limitations, load shedding was required, and continuous stabilization efforts are underway.