The National Electric Power Regulatory Authority has instructed the state-owned power distribution companies (Discos) and K-Electric to return Re0.50 per unit and Rs4.03 per unit respectively to customers, as they had charged extra based on the reference monthly fuel costs. NEPRA has also turned down the Ministry of Energy's proposal to delay K-Electric's FCA process, stating that the MoE's request to postpone the FCAs is premature without any official decision from the cabinet.
In two separate rulings, the regulatory body has approved a negative adjustment of Re0.50 per unit against the positive adjustments of Re0.10 per unit that the DISCOs had requested, concerning the May monthly FCA. Conversely, regarding the negative adjustments of Rs4.69 per unit sought by KE, the authority has permitted a refund of Rs4.0349 per unit to consumers based on the April FCA. In a petition filed on behalf of the former WAPDA Distribution Companies (DISCOs), the Central Power Purchasing Agency Guarantee Limited (CPPA-G) stated that the actual fuel cost in May was Rs7.4940 per unit, which is Re0.1015 per unit more than the reference cost of Rs7.3925 per unit for that month.
However, following multiple calculations, the regulator determined that the real fuel cost for May was Rs.6.8972 per unit, which is Rs 0.4952 per unit lower than the reference tariff of Rs.7.3925 per unit. The regulator has instructed the Discos to return Re0.4952 per unit to consumers in the July bill.
The CPPA-G has asked for Rs57.333b in fuel cost elements from different plants for May 2025, but the regulator approved Rs51.847b after subtracting Rs5.486b, due to the latest NEPRA decisions on applicable fuel cost components for the same month. K-Electric had requested NEPRA's approval for a refund of Rs4.69 per unit to consumers, which would affect Rs7.713 billion, as a result of the April 2025 monthly FCA.
However, after setting aside Rs0.8 billion related to partial load, open cycle, and degradation curves along with startup costs for the period from July 2023 to April 2025, the regulator has approved a refund of Rs4.0349 per unit. K-Electric had requested Rs16 billion for the same reasons during the period from July 2023 to April 2025. The Authority has already temporarily set aside Rs15.2 billion from monthly FCAs between November 2024 and March 2025 to avoid placing an excessive burden on consumers in the future for these outstanding costs. Therefore, as of April 2025, Rs0.8 billion remains pending due to partial load, open cycle, and degradation curves along with startup costs, according to K-Electric's claims.
In line with the principle of not overburdening consumers at a later stage and ensuring timely recovery of reasonable costs, the Authority has decided to temporarily withhold the pending amount of Rs.0.8 billion from the immediate FCA of April 2025. 31. Based on the above discussion and after considering the adjustments mentioned earlier, the Authority has calculated a negative FCA of Rs4.0349/unit, resulting in a negative impact of Rs6,176 million for the month of April 2025, which will be passed on to consumers in the billing month of July 2025. 32. The aforementioned negative FCA of Rs.4.0349/unit is being provisionally allowed, subject to adjustment once the MYT of KE for the period FY 2024-30 is announced. Any difference in cost, if applicable, will be adjusted in future revisions. NEPRA has also turned down the federal government's request to delay the KE's FCA process for April, stating that provisional FCA proceedings have been ongoing for about two years, yet the MoE never raised any objection to the reference FCC of Rs15.9947/unit. The proceedings for the FCA of April 2025 were initiated through an advertisement dated 12.06.2025, and the hearing was rescheduled twice, but the MoE has not managed to submit any policy guidelines or obtain Cabinet approval. The regulator stated that the MoE's request to delay the FCAs is premature without any formal decision from the Cabinet. Furthermore, under Section 31(7) of the NEPRA Act, the Authority may, on a monthly basis and no later than seven days, make adjustments to the approved tariff due to variations in fuel charges, although these timelines are considered advisory rather than mandatory.
The NEPRA Act ensures consistent tariffs for public sector licensees, but the NE Policy 2021 states that the government can also maintain a uniform consumer tariff for K-Electric and state-owned distribution companies (even post-privatization) by including direct or indirect subsidies. Hence, it is yet to be determined if the NEPRA Act and other relevant documents permit uniformity in FCAs or not. Moreover, the delay in MLRs does not prevent the Authority from continuing with FCA proceedings, as there is no suspension in place. The regulator has instructed KE to refund Rs4.0349 per unit to consumers in the July bill.
Provided by SyndiGate Media Inc. (Syndigate.info).